Why is There a Chip Shortage for Cars?

Does it seem like it’s harder to find new cars for sale in the Myrtle Beach, SC area, and that the ones that are for sale are more expensive? You’re not imagining things. There are few cars for sale, because there’s a computer 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? Blame COVID

So, why is there a chip shortage for cars? What is the chip shortage caused by? Well, COVID-19 not only wreaked havoc on people’s health, public school schedules, and restaurants. It took a toll on the global supply chain for computer chips and processors, resulting in fewer cars for sale in the Conway, SC area.

COVID-Related Causes for the Chip Shortage in Automotive Products

• 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.
• 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.

What is the Chip Shortage Caused By? Fire and Floods

Is COVID the only answer to, “Why is there a chip shortage in cars?” It turns out that disasters have played a role as well. All of this has resulted in fewer cars being manufactured and higher prices for the ones that have been produced, since demand now outpaces supply. Here are a couple of other causes:

Other Causes for the Chip Shortage in Automotive Products

• 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.

You Can Still Find Great Cars for Sale at Victory Chrysler Dodge Jeep Ram

Even a global chip shortage can’t stop Victory Chrysler Dodge Jeep Ram from offering you fantastic cars at a great price. And if you really want to avoid those rising car prices, check out our used cars priced under $10,000. We’re just a short drive away from Wilmington. So, drop by or contact us today!