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Why is There a Chip Shortage?



Many of our favorite devices rely on semiconductors, or chips, to function. These chips are the brains of our electronics, but with the current chip shortage, you may notice a limited availability of certain items like game consoles and vehicles. But what is the chip shortage, and why is there a chip shortage for cars around Oakland? With the San Francisco Honda service center, let’s take a look at the factors behind the chip shortage in the automotive industry.



What is the Chip Shortage?

As you may expect, the reason why there is a chip shortage is the result of the worldwide COVID-19 pandemic. While many factories closed and faced a shortage of the necessary supplies, the demand for electronics continued to grow, and manufacturers struggled to meet the demand.

Why is there a chip shortage for cars? The automotive industry relies heavily on chips to make the fan-favorite models you see around Daly City. The disruption to business caused by the pandemic led many vehicle manufacturers to cancel their chip orders. This means that the companies manufacturing the chips switched producing consumer goods, causing an even larger backlog for the chips made for vehicles.

Chip Shortage in Automotive Industry

Since we have a better understanding of why there is a chip shortage for cars, let’s take a look at how it affected the industry as a whole. While you’ll still see your favorite Honda models around Colma, US manufacturers are expected to make 1.5 to 5 million less cars this year. Top manufacturers have changed how they operate to accommodate the chip shortage in the automotive industry. Ford and General Motors have taken to limiting their production lineup, while Tesla has opted to revise their software to support alternative chips to keep up their production.

What Does the Chip Shortage Return Look Like?

There’s no telling when the chip shortage in the automotive industry will bounce back to normal production levels. Top vehicle manufacturers like the CEO of Stellantis said the shortage “is going to drag into ’22, easy.” There’s no exact end date, however, general consensus seems to expect regular production levels returning in a couple years.

Shop New Vehicles with San Francisco Honda!

While the effects of the chip shortage is widespread, you can find new Honda models at San Francisco Honda. Reach out to our team to schedule a test drive of the new Honda HR-V or Insight. Be sure to check our new vehicle specials to great deals on models, and don’t hesitate to talk to the team in our finance center for all your car buying questions.


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