Why in the heck is there still a microchip shortage for cars?

Microchips go into virtually everything we buy. At the beginning of the pandemic, automakers cut their semiconductor orders, anticipating a big downturn in sales. Manufacturers that make chips reallocated that factory space to much more profitable, much more in-demand chips for iPhones and PlayStations and other things. Now that auto sales are red-hot again, chipmakers can't meet demand because their capacity has been spoken for. Unfortunately, it's not as simple as turning the lights back on and ramping production up again. Profitability is another issue. The automotive industry requires older chips, ones that make semiconductor manufacturers less money. It takes only a fraction of the processing power to run a few parking sensors than it does for an iPhone 13 Pro. Additionally, for safety, car companies use proven designs, reliable chips that function for decades in all temperatures, humidity levels and other conditions. Whether it's Nvidia, Texas Instruments, TSMC or any other manufacturer, chipmakers have been incentivized to produce more advanced semiconductors at the expense of their automotive customers.

Meet the Expert

Chris Kays founded F1 Computing Solutions, LLC, in July 2005. Having spent many years in the IT field and knowing just how difficult and frustrating it could be to find support in a timely manner, Chris decided his IT company would focus on high-quality, timely customer service.