The Impact Of The 2021 Semiconductor Chip Shortage On Auto Manufacturing

Chip processor

Have you been shopping for a new car recently and noticed that the new car lots are looking pretty bare? Well, you’re not alone. Across the world, automotive manufacturers are currently being forced to shut down production at their plants across the world. This shutdown is due to a global shortage in semiconductor chips that are a direct result of Covid-19 supply chain disruptions.

What are semiconductors and why do they affect my ability to buy a new car? Find out below!

What Are Semiconductor Chips?

Semiconductor chips are what we think of as computer chips. They’re made out of silicon and house sets of electronic circuits and transistors. Semiconductors allow us to efficiently store and process data and electrical signals. They are the foundation of all of the electronics that we use.

How Are Semiconductors Used in cars?

Vehicles these days are getting smarter, more comfortable, and more efficient. This is due to huge advancements in the automotive technology sector of which highly efficient semiconductor chips are the foundation. They are at the core of every piece of technology in your car. This includes but is not limited to:

Automated braking and lane assistant to keep you safe
Your heads up display to keep your eyes on the road
The infotainment system that conveniently integrates with your phone
The sensors around your car that notify you when something is broken or your tires are low on pressure
The different drive modes that change your throttle response or the height of your suspension
The 360 camera system in your vehicle and the lidar sensors that are connected to it that tell you how close you are to the vehicle behind you when you’re parking

What To Expect For 2021 Car Buying?

If you take one thing from this article, it’s that shoppers thinking about buying a car in 2021 should start looking and put in their requests now.

On February 11, 2021 the Biden administration announced they will be signing an executive order that will help ramp up semiconductor chip production. This comes after Ford and GM shut down most of their plants, furloughed workers, and declared they are forecasting a revenue hit of at least a billion dollars.

While the news of an executive order sounds promising, it doesn’t mean anything immediate will happen and production will likely be limited until the fall. This means it will be extra important to special order the vehicle you want unless you’re okay waiting until the end of the year to make your purchase.

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