Why Is There a Chip Shortage?

A lot of times as consumers around Pebble Beach, we don’t think about what goes into the things we use every day, but the fact is that many modern inventions that we enjoy in this world are now made of hundreds, if not thousands, of individual components. One such component, found in everything from cars– like the Lexus ES series– to desktop computers, is the semiconductor chip. It’s a small, easily overlooked part yet its recent absence of availability is holding back manufacturers across multiple industries. 

A prime example of the impact of the semiconductor chip shortage (often simply referred to as the “chip shortage”) is the bludgeoning damage done to auto-industry, vis a vis new car availability. Why is there a chip shortage? What is the chip shortage exactly? In this quick guide, the knowledgeable team at Lexus Monterey Peninsula will cover just that to provide some understanding toward the present sluggishness in new car availability. 

What is the Chip Shortage?

So this little chip, right? What’s going on? What is the chip shortage all about, and how does it impact Salinas residents? Well, in early 2020, a brew of circumstances came together that put an incredible amount of stress on microchip manufacturers like Samsung and Intel. As a result of the holiday season, consumer electronics were already in high demand, but when the global pandemic known as COVID-19 began shortly thereafter, demand for electronics became even higher with bored residents having been encouraged to stay indoors. The impact of COVID-19 didn’t end there. Many factories which had a hand in producing the equipment needed for semiconductor chip production were shut down for months, which in turn made chip production all the more needed, and all the more difficult. 

Aside from the imbalance of supply and demand, a few other factors impacted, and continue to impact, the availability of these chips. Raw materials are in short supply, some industries panicked and scrambled to stock up, and even natural disasters came into play. In all of that damage is the auto industry as the chip shortage also affects car production. So how is the auto industry holding up?

Automotive Chip Shortage

Now that you know why there is a chip shortage, you can probably guess why there is a chip shortage for cars as well. There’s no gentle way of putting it– every auto manufacturer has suffered losses from the chip shortage and have had to alter their production schedules and rollout plans in order to compensate for their biggest blow in years. The consulting firm AlixPartners estimates that the global auto industry will produce somewhere between 1.5 and 5 million less vehicles this year than was originally expected, and the situation isn’t expected to get better any time very soon.

Lexus Monterey Peninsula’s Response to Automotive Chip Shortage

If you’ve been thinking of getting a different car near Monterey Bay, you might be worried that it will be difficult with the automotive chip shortage. Lexus Monterey Peninsula is determined to continue working to locate the Lexus model of your dreams and we have been finding innovative ways to make that happen despite the shortage! Take a look below:

• Rely on our team and use our tried-and-tested vehicle finder program to get the car you want. 
• In this current situation, the used vehicle market is extremely hot, so if you are considering trading in your pre-owned car, we suggest now is the best time to take advantage of our upgrade program! 
• With many people selling their cars and the lag in new vehicle inventory, you will have an easier time finding a new-to-you car. There are many benefits of a pre-owned vehicle and when you shop one from Lexus Monterey Peninsula, you can even get warranties on them! Talk to us to see why you should consider buying a used car.

Talk Auto Industry with Lexus Monterey Peninsula

Now that you know why there is a chip shortage for cars, turn to our team of car enthusiasts at Lexus Monterey Peninsula for more information. We’re actively keeping on top of auto industry news, and our product advisors are great sources of advice in this unsure market! Feel free to reach out to us at any time whether you want to know more about the chip shortage or about how Lexus Monterey Peninsula is combatting this card we’ve been dealt with.