Everything you need to know about the car chip shortage

If you’re in the market for a new car, you’ve probably come to the realization that inventory is looking a little low lately. And we’re not just talking new Toyotas – we’re talking across the board, all automotive makes, and on a global scale. The car chip shortage has taken its toll on shoppers and dealers alike, and Toyota of Clermont is here to discuss what a car chip is, why there’s a car chip shortage, and what it means for everyone trying to get behind the wheel of a new vehicle.

car chip shortage

Car chips: The basic breakdown

Let’s kick things off by discussing exactly what a car chip is. Basically, it’s a semiconductor chip (also known as a microchip) that plays a critical role in the function of all modern electronics. They’re basically the brain of the device, and work as a type of electrical circuit to control the flow of electrons. Here are a few more facts about car chips to keep in mind:

  • They’re typically made of silicon.
  • They’re highly engineered and have a series of transistors that control the electron flow.
  • They’re extremely small. To give you a better idea of how small they are, one transistor on the chip is 10,000 times smaller than a single strand of hair.
  • They vary in their complexity; average chips can be found in items like electric toothbrushes, while advanced chips are found in things like your new Toyota.
  • It takes almost 12 weeks to build an average microchip, while more advanced chips can take 18-20 weeks to complete.
  • It also takes a lot of money to build a car chip as it’s a very complex process. Combine that with the time needed to do it and it becomes apparent why there are only a handful of places around the world that produce them.
  • The chip shortage began when the COVID-19 pandemic slowed production of pretty much everything, as well as caused major global shipping delays.
  • The plants that produce the chips are trying hard to keep up with demand, but right now the lead time is about six months for an order of these critical components.
  • And while some people may think that the solution is to just open new plants, it unfortunately takes years – and billions of dollars – to get just one plant off the ground.

Why is there a car chip shortage?

So now that you’re well-versed in what a car chip is and what it’s used for, it’s time to jump into why there’s a car chip shortage and how it’s affecting the automotive industry and Toyota cars. There are two main reasons we’re currently facing a car chip shortage:

  1. Modern cars are much more tech-driven than their predecessors. All of the high-tech safety, entertainment, and performance features require car chips to do their job.
  2. COVID-19 had a huge impact on supply and demand. Unfortunately, shutdowns and quarantines back in 2020 led automakers to think that the demand for new cars would drop. They forecasted fewer sales and because of that, canceled orders for car chips. They were wrong, and although demand did drop momentarily, it bounced right back up, resulting in the shortage.

How long will the car chip shortage last?

So how long are we going to be dealing with the effects of the car chip shortage? It’s still an unknown. Some are forecasting that we could be out of it by mid-2022; others don’t see the light at the end of the tunnel appearing until 2023. We don’t know, but one thing we’re certain of is that car chip shortage or not, we have trucks full of new Toyotas arriving at Toyota of Clermont every single day. We also offer the option to preorder your new Toyota and pick it up when it arrives!

Ready to start your shopping process? Make it happen – visit Toyota of Clermont at 16851 State Road 50, just west of the Florida Turnpike. You can also shop online or call us at (352) 404-7000 to get the ball rolling!