Why is there a shortage of automotive chips now?
2 Answers
Now the reasons for the shortage of automotive chips are as follows: Increased market demand for chips: As people work from home, the demand for chips used in mobile phones and computers has increased. Semiconductor chip companies have shifted their production focus to the consumer electronics field. When automakers gradually resumed production, semiconductor chips could not provide sufficient supply in time, leading to the current difficulties faced by the automotive industry. Continued impact of the pandemic: Under the continuous impact of the COVID-19 pandemic, the global supply of semiconductor chips has become unbalanced. As a result, in addition to the electronics industry, the automotive industry has also been severely affected, forcing many global automakers to reduce or suspend production of new vehicles.
I have been following global supply chain dynamics for several years, and the root causes of the automotive chip shortage can be attributed to a triple shockwave. First, during the early stages of the pandemic, many chip factories shut down or reduced production, with workers absent and production lines slowing. Then came a dramatic shift in demand: the automotive industry's recovery far exceeded expectations, and the rising penetration of smart and electric vehicles led to a surge in chip demand while production capacity remained fixed. Finally, there was the logistics nightmare—shipping delays, port congestion, and container shortages made it difficult to transport chips. Adding geopolitical factors like trade disputes limiting exports and natural disasters disrupting operations further complicated the issue. This has forced automakers to rethink their supply chains, with localization and building local factories becoming a trend. At the consumer level, new car deliveries have been delayed by months, while the used car market has boomed. Overall, the shortage is the result of multiple unexpected factors overlapping, and future solutions will require investment and collaboration to alleviate the problem.
