Why is There a Chip Shortage?

Microchip

 

As you may have heard, there is a chip shortage causing major interruptions in various industries. This impacts people everywhere, even in Santa Rosa. Allow us to provide information to help you understand the current problem and the implications. 

What are Chips?

Unfortunately, we’re not talking about a potato or tortilla chip shortage, so no need to go to the store and stock up. The chips in discussion refer to electronic hardware that serves as control centers to many electronic devices. They are also known as semiconductors. These small objects perform various functions and allow technology to advance to make our daily lives simpler and easier. 

What is the Relevance of Chips?

We engage with chips multiple times a day, every single day without knowing it. They’re in our phones, laptops, watches, washing machines, refrigerators, TVs, electronic toothbrushes and even our cars. The more complex the system, the more chips are needed to make sure every button is given the correct instructions every time it’s pressed. Hundreds and thousands of chips are necessary to make sure you have a smooth ride in your Chevrolet as you drive through Larkfield-Wikiup. They are responsible for your lane detection, heated seats and sports mode features in our cars. Without these chips, basic daily tasks become time consuming and tedious. 

Why is there a Chip Shortage?

The chip shortage has been a problem for a few years, but now it’s more obvious than ever There are several reasons for the current chip shortage:

  • Covid-19: When the pandemic started, many factories were shut down in order to keep employees safe. Because of this, the supply of chips significantly reduced. Even though factories are up and running again, there is a huge backlog and exponentially larger demand than there is supply. 
  • Change in Priority: Chips for vehicles have specifically taken a drastic hit. WHen the pandemic started, many car companies cancelled their orders to mitigate major economic consequences from the pandemic. Chip manufacturers, therefore, began to switch their focus to creating chips for consumer products to meet the especially high demand since most people were spending all day at home. 
  • Weather: Over the past few years, there have been extreme weather events. Factories have been shut down due to winter storms, fires and floods. 
  • Government & Policy: The chip shortage is a global issue. Tensions in different countries have caused governments to prohibit selling chips to foreign countries. Although there are new chip manufacturers emerging, it will take a long time for them to ramp up production levels to meet the high demand. 

What are the Impacts of the Shortage?

The automotive industry has been hit the hardest with the lack of chips. The availability of brand new cars is decreasing as car companies are making millions less vehicles than two years ago. It’s also increasing the time it takes to repair cars depending on the request. Consumer technology companies such as Apple and Samsung are offering significantly less new products because there aren’t enough chips to make their usual millions. Still working from home in Petaluma? Finding the exact new laptop you’re looking for may be more difficult as well. Overall, accessibility has been majorly impacted by the chip shortage.

Visit Mcconnell Chevrolet Today

If you’d like to know how the chip shortage specifically affects Chevrolet, contact us during our operating hours. Our finance department can help you determine which financing method best works for you and give you the next steps in the purchasing process. If you’d like to learn more about the repair time for your vehicle, call our service department. We look forward to answering any questions you may have!

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