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Semiconductor Chip Shortage – the reason behind the delays in car production

Semiconductor Chip Shortage – the reason behind the delays in car production
30 March 2022

If you have been looking for a new car and have been wondering why the lead times are longer than usual or you are experiencing delays with your current order? The microchip shortage is having a big impact on almost every industry including cars.

There is a worldwide shortage of semiconductor chips, which are a crucial part of every electronics product. This has impacted much more than just the automotive industry including mobile phones, computers, and everyday household domestic appliances.

New cars can require up to 1400 computer chips to manage various systems, ranging from electric windows to infotainment screens and active driver safety systems.

What caused the global car chip shortage?

This all started from the increase in demand for personal computers and other electronic devices that people needed to work from home during the last year due to the pandemic.

For the automotive industry, many manufacturers cancelled their microchip orders due to a lower demand over the pandemic. This was compounded by a steep rise in new car sales in late 2020, which caught car manufacturers by surprise and left many without enough chips to keep up with demand for cars

How are microchips made?

Microchips are not made like normal car parts, they need specialist factories that are ultra clean which means free from dust and static electricity. They are made by building up layers of interconnected patterns on a silicon wafer. The microchip manufacturing process involves hundreds of steps and can take up to four months from design to mass production.

How does this affect your new car order?

Can manufacturers are taking a big hit due to this semiconductor shortage. This is because the industry relies on these chips for almost everything including managing engines, infotainment systems and driver assistance systems. Unfortunately, when the factories reopened and they tried to reorder the chips, they were at the back of the queue.

Other factors contributed to chip shortage include a fire at the Japanese factory in March 2021, the Renasas plant in Japan caught fire, An area of 600 square meters (6,458 square feet) was burned in the fire, with 23 machines destroyed and the ultra-sensitive clean room needed for chip manufacturing filled with smoke and soot. The plant makes nearly a third of the chips used in cars around the world.

The Storm in Texas where around 12% of the worlds micropchips are made caused a number of them to be shut down. It’s been so catastrophic that one manufacturer, Infineon, reckoned it would take months to get production back to normal — with every one of its chips slottted for production in the following 12 months already reserved.

When will the chip shortage end?

It doesn’t look like the shortage of microchips is going to end anytime soon, and not likely to see a change in 2022.

Ford  itself has said it expects the production of 1 million of its own cars to be hit by the shortageJaguarLand Rover and MINI all previously put their production on hold in the UK.

Some car manufacturers have adapted their cars due to the lack of chips including the Peugeot 308 is now being built with dials as opposed to the digital display. Nissan have removed navigation systems out of many of their cars that would usually have them. So if you’re looking for a new car, you may see some features have been amended / adapted by manufacturers, and longer lead times than normal.

If you’re in need of a new car, there are always plenty of great lease deals in stock now for a  quick delivery. Or browse all of our offers allowing plenty of time for your new order

Make sure to check our website regularly as new deals, both factory and stock, are posted regularly. not all lead times are as long as other so please get in touch to find out more.

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