Why is There a Chip Shortage?


The automotive chip shortage has been making headlines for months, but just why is there a chip shortage and what does it mean for you? It all starts with the small semiconductor chip, which act as the brains of your electronic devices. These chips power everything from electric toothbrushes to washing machines to Ford vehicles. When the pandemic hit, supply could not keep up with demand – resulting in the car chip shortage that you’ve heard so much about in Troy. How can you navigate the car shopping process during the Ford chip shortage? Ford of Latham is here to give you the inside scoop!

What Caused the Automotive Chip Shortage?

When the pandemic hit, consumers around the world bought entertainment devices and other electronics at higher rates than expected. Among the industries hit hard by the pandemic chip shortage, the car industry was one of the most extreme. Why?

  • Semiconductor chips require lots of skill to create, and not just any manufacturer can produce them. Many industries rely on the same limited labs,
  • Labs require experts to craft each chip, and pandemic restrictions meant fewer workers could operate at any given time.
  • Shipping also faced its own set of challenges during the pandemic, so even the few chips produced got stuck during transit.

How Does the Car Chip Shortage Affect New and Used Cars?

Though there was an increased demand for new and used vehicles, manufacturers were slowing down production at this time. In fact, some companies even suspended manufacturing completely! This led to fewer new models on the floors of Albany and Schenectady, and increasing price points at many dealerships. This has also raised the average price of the used car market. The good news? Resale costs have never been better.

How Long Will the Automotive Chip Shortage Last?

While no one knows exactly when the automotive chip shortage will end, many experts believe we’ve seen the worst days behind us. That’s based on the relaxing of COVID-19 restrictions and the increase in vaccination rates around the world. As production catches up with demand, you can expect to see more models hit the showrooms – and prices returning to normal!

Can I Still Get a Car at Ford of Latham?

Yes! Despite the car chip shortage, Ford of Latham has plenty of models in our new and used inventories to make your daily drive better than ever. From sedans to SUVs, contact us with any questions and stop by our dealership in Latham to take some test drives.

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