Is the Automotive Chip Shortage Improving?

You might be wondering if the automotive CPU shortage is improving or whether it's just another bump in the road for systems integrators. While many factors affect the automotive CPU market, one of the biggest is chip prices. 

Today's automotive industry is one of the most complex and competitive industries in the world. It requires plenty of resources and effort to produce safe, reliable, and popular cars among drivers. To achieve these goals, manufacturers have turned to computer chips as their primary power source for creating an automobile's sophisticated systems. This post talks about the CPU shortage and how it's affecting automakers around the globe.

Events Leading Up to the Current Situation

The global shortage first occurred in 2017 when many major players in the industry started reporting that they were experiencing shortages of critical chip-making components. As a result, car companies started increasing their production capacity and investing heavily in manufacturing plants worldwide. In September 2018, chipmakers began experiencing production issues due to a lack of available silicon wafers. The shortage was caused by a flood of new automated production lines that still needed to be ready for full-scale production. However, this strategy did not help solve the problem. As new technology is always evolving and becoming more sophisticated over time, so too must be its components if it is to remain competitive in today’s marketplace. As such, there has been another significant surge in demand for this technology over recent months as brands like Tesla and General Motors continue ramping up their production efforts to meet consumer demand across North America and Europe.

Causes of Automotive Chip Shortage

Decrease in the Supply of Raw Materials

The automotive industry has a very high demand for chip material. The reason is that the current trend of automobile production is to reduce weight and increase fuel efficiency. In order to meet these requirements, it is necessary to use new technologies such as laser welding and vacuum arc welding. These technologies are more complex than conventional welding processes, which means that they require more materials. By 2023 the demand for this kind of material will reach 5 million tons per year. If there is no increase in production capacity or decrease in supply, then we can expect an increase in the price of this product by 20% annually.

Manufacturing Defects

Manufacturing defects are the most common cause of the shortage. Manufacturing defects can occur due to bad equipment, machine errors, software errors, or even human errors. The first thing done to solve a manufacturing defect is to collect all the available information about the issue and its cause. Commonly, a manufacturer might have bad quality control. That can lead to the production of defective parts. The quality control department tries to catch any product defects before they reach the market, but sometimes it fails to succeed in this task.

 

In order to boost their profit margins, many chip manufacturers have started to produce their products with lower yields. Such leads to a situation when many chips are produced, but they cannot sell at a reasonable price because they need to meet specifications set by consumers or application engineers.

Economic Condition

The chip shortage is largely a result of the global economic crisis. The cost of raw materials has risen, and manufacturers are having trouble getting enough of them. Such means that they can't afford to manufacture new cars, though this doesn't necessarily mean that there aren't any new cars on the market. As a result, some companies have been forced to reduce their production and supply to meet their customers' requirements.

Possible Solutions to Automotive Chip Shortage

Expand Production Capacity

To solve this problem, automakers could explore expanding their production capacity by adding new facilities or increasing their existing ones to meet the growing demand.

Alternative Materials

Boron nitride ceramics are a good replacement for silicon carbide. They are more resistant to corrosion than silicon carbide and can be processed at low temperatures and high pressures. Boron nitride ceramic is also thermally stable up to 1000°C, which allows it to be used in applications where silicon carbide would otherwise be melted.

In Conclusion

It's a tough time to be auto shopping; the global chip shortage has made it difficult and more expensive for automakers to get their hands on the chips they need. This isn't just affecting production numbers - auto parts stores are running out of certain auto components due to the shortage. With auto parts supply chains stretched thin, it might be tougher than usual to find the auto parts you're looking for.  The automotive chip shortage is still a problem, but we’ve got you covered. Here at HeyAuto, we have an inventory of vehicles that are ready and available for purchase now. So whether you’re in the market for a new ride, we’ve got you covered. Check out our website today to find the perfect vehicle for you.