Without chips, car computers lack a brain for things like navigation features and window control.
While the reality of the chip shortage is more or less common knowledge, the reasons it exists may still remain opaque. Are you wondering, “Why is there a global chip shortage?”
Keep reading for the facts you need to know.
The Covid pandemic is the most widespread reason for the semiconductor shortage. It disrupted supply chains on a global scale.
Companies couldn’t get the raw materials for manufacturing. When they got the materials, they couldn’t guarantee delivery schedules.
On top of that, a lot of manufacturing requires people to work in close proximity. Social distancing orders or stay-at-home requirements made manufacturing difficult or impossible, which meant orders lagged.
Even with manufacturing largely back up and running, most chip companies have backorders to fill.
Another key factor for the semiconductor shortage is the chip manufacturing concentration in East Asia. While the companies producing chips there may be up and running again, the supply chains are in no way back to their former efficiency.
The Western Hemisphere, in particular, is subject to shipping delays from East Asia.
For the U.S., there is an ongoing labor shortage affecting almost every industry. The pandemic provoked a large number of people to simply leave the workforce entirely.
This included a large number of Baby Boomers, who historically have made up a large portion of the domestic workforce.
That labor shortage hit particularly hard in areas like manufacturing, but also in areas like dock workers. Without enough dock workers, imports like semiconductor chips sit in ports for days or weeks.