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When Will The Microchip Shortage End? How To Buy Cars During This Time?


The year is about to end and yet the question still lingers in most industries. And the question is, when will the microchip shortage end?

The short answer to that question is We. Don’t. Know. Yet. I guess it’s safe to say that the microchip shortage will end when it ends. But for now, we can only guess. Besides, we can also find more effective ways to buy cars in this dire time. So, whether you’re looking for a vehicle to drive or to sell in your dealerships, stick around.


In this digital age, microchips make the world go round. But, things went south at the start of 2020. The pandemic made a dent in what and how we do our daily lives. For the most part, the COVID-19 crisis played a vital role in this global microchip shortage. Shutting down of chip factories had led us to what most industries are facing today. This hit hard, especially in the automotive and IT sectors.

But let’s not fully blame the pandemic in this situation, as industries themselves have their own share of fault. Poor planning, dependence on few manufacturers based in other countries, as well as natural calamities, are some of the reasons why the shortage happened. In short, the microchip shortage is more complex than one would imagine.

Below is everything you need to know about the microchip shortage, when it is projected to end, and one effective tip to buy cars in this strenuous time for both buyers and dealerships.


How Microchip Shortage Affected The Automotive Industry?

The microchip shortage that made every industry struggle is immensely affecting the auto industry. And the worst part is that no one knows how to solve this problem fast and easily. This problem hasn’t been gone unnoticed; most world leaders are already looking into this issue. Be that as it may, the problem is still there; there are not enough chips yet to cover the production and financial loss.

As mentioned, most devices need microchips to work, including cars. With all the latest auto technology car manufacturers are installing, a car may have numerous chips placed in it. This tech tremendously helped automakers to make their products much faster and more efficient. We’ve come far from using dials and tubes.

However, production slowed down as soon as the pandemic started. Many microchip factories all over the world had no choice but to close down production temporarily. Then, the domino effect started. Since there were little to no available microchips, automakers had to slow down production or stop altogether. On dealerships’ part, the units in their inventory also slowed down, leaving some with no choice but to close shop.

Read More: Will Used Car Prices Go Up In The Future? Yes, If The Semiconductor Shortage in 2021 Crisis Continues

Who Is Suffering The Most

In a general sense, everyone is on the losing end here, but the suffering goes far from the regular (and disappointed) car buyers. First off, car dealerships are one of the most affected by the microchip shortage. When their inventory is low because cars are a rare commodity, some of them have to temporarily or permanently close down. In addition, they also had to let go of their employees, increasing the jobless in the country.

Car manufacturers are also gravely affected by the shortage. Without chip companies producing enough to develop vehicles, automakers also need to slow down their production, even some stopping for some of the models. And, sadly, they also need to lay off most of their employees to cut some costs.

Lastly, the most affected is, as we have mentioned, the employees. Whether they worked in a dealership or at a car manufacturing factory, being laid off is not the most welcoming news, especially in a time like this pandemic. Aside from losing their income source, getting a job is also difficult nowadays as it is scarce.

When Will The Global Chip Shortage End?

The bad news is that we are still not sure yet when this microchip shortage will end. Experts’ analyses have different calculations – some said it will end by next year while some say it may continue until 2023.

The good news is that both the government and the private sector (at least in the US) are trying to come up with solutions to combat the shortage. These solutions, they believe, will slow down the damage and make the problem end more sooner than later.

Just last month, Texas Instruments announced that they are planning to build up to four new semiconductor plants in the Lone Star state. Semiconductor fabrication plants are facilities that produce microchips. The said plan would cost as much as $30 billion, and the first two plants are set to begin next year.

Apart from Texas Instrument, Korean company Samsung is also set to build a plant by next year. The plant will cost an estimated $17 billion. Because of this, a lot of states and cities in the US are trying to court the company to bring the business to their areas for faster chip production.

As for the band-aid solutions, experts suggest being more cautious when doing business with chip suppliers. Gaurav Gupta, the research vice president of the consulting company Gartner, suggests remaining on the lookout. “Since the current chip shortage is a dynamic situation, it is essential to understand how it changes continuously. Tracking leading indicators, such as capital investments, inventory indices, and semiconductor industry revenue growth projections as an early indicator of inventory situations, can help organizations stay updated on the issue and see how the overall industry is growing,” Gupta said.

How To Buy Cars At This Time Of Microchip Shortage

Now that we know much about the microchip shortage and the educated guess on when it will end, the next question is can dealerships still thrive during this time. The answer is a big yes. One simply needs to be creative and resourceful to scout the cars to buy. Below are some tips on how you would still be able to acquire vehicles in the age of microchip shortage. Please take note that these tips can be used by either private car buyers or car dealerships.

Check Online Car Marketplace

Take advantage of the car marketplace online. Regardless of whether you’re a private person just looking for a new car to drive or a dealership owner wanting to increase the inventory, the car marketplace is the perfect site to visit. There are several car marketplaces online that offer hundreds and even thousands of vehicles in their huge inventories.

Be cautious when looking for these marketplaces online, however. Choose the ones that only showcase cars that either come from legitimate dealerships or those sites that provide complete vehicle condition reports.

The only disadvantage when buying cars on this type of platform is that some models you want may not be available in your area. Thus, you need to spend a bit more on the transfers. But it may be just worth it, especially when it’s sort of hard to buy cars (you want) during this microchip shortage time.

In Conclusion

Nobody can accurately tell when the microchip shortage will end. Analysts themselves have polarizing forecasts. But one thing is for sure; you can still buy cars during this time.

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