What is the “chip shortage” and why is it delaying the delivery of your car by several months [Video]


Automakers around the world are going through a difficult phase due to the pandemic and other issues. Sales have finally started to increase, but manufacturers are no longer able to produce vehicles at the same rate as before. In India, things are no different. There is a reason why the delivery of your new car that you have reserved is delayed. It is the shortage of chips or semiconductors. Here we have a video that explains what chip shortage is and how it affects your car delivery.

The video was shared by Interesting Engineering on its YouTube channel. The video talks about what a chip is and the reason for its shortage. The chip is actually used is almost everything we use on a daily basis. These are not only used in cars, but almost all of the electronic items that we use today.

One of the main reasons there is a shortage of semiconductor chips is the pandemic. Many manufacturers who use chips in their product have withdrawn their order because they believe the pandemic will reduce demand for their product. On the contrary, people started buying electronic items online and when demand soared there weren’t enough chips available for new orders.

Although chips may look like a small piece of equipment, it takes almost two months to make a chip. A chip goes through several stages before it can be installed in a car or electronic object. There aren’t many manufacturers that make semiconductor chips in the world. There are manufacturers like SMIC, TSMC and Samsung that make such chips.

TSMC and Samsung are already making chips at their maximum capacity. A car uses about 1,400 semiconductor chips, which is a large amount. Natural disasters such as drought in Taiwan have also affected TSMC’s production chips, as they use a large amount of pure water to clean the factory and silicon wafers. A fire also broke out at the Renesas Electronics factory in Japan, which mainly produces mini automotive controllers. Although production has resumed at this factory, it has not reached previous production levels.

As mentioned above, it takes about 2 months to produce a semiconductor and for these reasons, the time it now takes for a chipmaker to deliver chips to a carmaker has increased to almost 18 weeks. There are several car manufacturers in India who have already made the vehicle but are waiting for the semiconductor chips. Mahindra had delivered several Thar SUVs to the dealership without installing a touchscreen infotainment display for the same reason.

Many manufacturers are planning to cut production of cars at their factories as this is a crisis that will persist in the market for some time. This chip shortage is costing automakers millions. The popular electric car maker actually found a solution and rewrote the software in its own vehicle to support the alternative chips. In this way, Tesla has managed to survive the chip shortage and continues to maintain high production levels even during this time.

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