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Why is There a Chip Shortage for Cars?

Microchip

 

You may have noticed there aren’t as many new cars stocked at Birmingham Area dealers as you’ve seen in years past. That’s because there’s a chip shortage for automotive products. Why is there a chip shortage for cars? What is the chip shortage caused by? There are several reasons, and we go into all of them below. Let’s delve into the details.

 

 

What is the Chip Shortage Caused By?

So, why are there fewer cars for sale in the Bessemer area? Why is there a chip shortage for cars? What is the chip shortage caused by? There are several reasons for the chip shortage in automotive products. These reasons include the current pandemic, weather disasters, a major factory fire, and more. So, the current chip shortage was caused by a perfect storm of mishaps and disasters. Here are the causes:

Why is There a Chip Shortage for Cars?

  • The COVID-19 pandemic caused a large portion of the few semiconductor chip factories to close down.
  • COVID-19 also caused an increased demand for computer chips, as more people were spending more time at home and wanted more devices like tablets and game consoles to pass the time.
  • Winter storms in Texas caused some of America’s few chip factories to shut down for some time.
  • The Renesas plant in Japan, which produces a third of the world’s computer chips, was severely damaged in a fire.
  • COVID-19 also caused China’s Yantian port to shut down for a while, worsening the chip shortage since 90% of the world’s electronics are shipped through that port. That port has since opened up, but the shutdown caused a severe backlog of shipments.
  • Car manufacturers severely underestimated how many chips would be needed, as they were expecting a lower demand for cars during the pandemic. That means they didn’t order nearly enough chips. Chip manufacturers shifted to producing ships for other products.

Check Out the New Cars in Stock at Carlock Honda in Birmingham

We still have plenty of great new cars in stock at Carlock Honda, in spite of the chip shortage. Drop by to find out how easy it can be to get your next vehicle. While you’re here, make sure to check out our Freeway Honda specials. Our dealership is conveniently located near Mountain Brook. We’re here to help, so contact us today!

 

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