Why is there a car chip shortage, and why is it affecting new Toyotas?

How will the car chip shortage affect your car shopping process?
Buying online. Woman choosing car using laptop, top view
Preordering a Toyota(Shutterstock)
Published: May. 6, 2022 at 3:30 PM EDT
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If you’ve been shopping for a new car lately - or really even just paying attention to the world at all - then it should be obvious by now that there’s a car chip shortage affecting the automotive industry. But why are car chips so important, what do they do, and why is there a car chip shortage? Toyota of N Charlotte is here with answers. 

What is a car chip? 

First, let’s talk about what a car chip is. This microchip - also known as a semiconductor chip - is essentially the brain behind modern electronics. They work as a type of electrical circuit to control the flow of electrons via a series of tiny transistors. They’re typically made of silicon, and they’re small - to give you a better idea, one of those aforementioned transistors is about 10,000 times smaller than a human hair. 

Here are a few more things to know about car chips so you can better understand why the car chip shortage is happening. 

  • Car chips are incredibly versatile because they can vary in complexity. You’ll find them in everything from electric toothbrushes (simple) all the way up to the technology in your N Charlotte Toyota (complex). 
  • It takes a lot of time and a very complex process to create even one chip. A basic chip can take up to 12 weeks to finish, while more advanced chips can take up to 20 weeks. 
  • There are only a handful of semiconductor chip production plants in the world, which adds to the shortage issue. And the solution isn’t as simple as just opening more plants up - they take years and billions of dollars to establish. 
  • COVID-19 threw a wrench into things big time. Not only did it shut down production plants, but it also disrupted global shipping routes in a big way. 

But why is the car chip shortage affecting the automotive industry so hard, especially if these chips are used in so many different items? Two reasons. 

Why is the car chip shortage happening? 

Number one, modern cars are far more technologically advanced than previous generations of cars. You want all of that entertainment, safety, convenience, and connectivity tech in your N Charlotte Toyota, and that takes a lot of chips to make happen. 

Number two, COVID-19 didn’t just mess up shipping and production - it also messed up forecasting. When the pandemic began, the world faced massive lockdowns and quarantines. Automotive forecasters believed that this would cause a sharp drop in demand of new cars. Thus, they cancelled orders for parts… including car chips. But they were wrong, and demand quickly bounced back up, but the parts weren’t there to fulfill it. 

When will the car chip shortage end? 

We don’t know when the car chip shortage will end; some forecasters say middle to end of 2022, while others think sometime in 2023. All we know is that we have trucks full of new Toyotas arriving every single day at Toyota of North Charlotte and if you can’t find what you want on our lot, we can help you preorder it online and have it delivered here. Inventory may not be physically on the ground, but we can still help you find the perfect new Toyota. 

Ready to shop? Visit Toyota of North Charlotte in person at 13429 Statesville Road, just off I-77 at exit 23 in Huntersville. You can also shop online OR call us for more information at (704) 875-9199. We’re open seven days a week! 

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