When Will the Chip Shortage Finally End?

We’re all sick of the chip shortage by now. It’s severely affected both the new and used car market, and that’s just a start. Moreover, the shortages have spread to other industries. You can’t get a computer graphics card right now for the same reason you can’t get a Ford Bronco. Unfortunately, you won’t be getting that PS5 anytime soon either. The resale markets are insane for just about anything that uses electricity right now. So, that begs the question: when will all this finally stop?

Semiconductor producer Bosch may have some answers

The cause of the chip shortage: semiconductors in a lab in Germany
New chips can’t be made fast enough | Jens Schlueter via Getty Images

Unfortunately, the world’s largest auto supplier doesn’t necessarily have any good news in regard to the chip shortage. Bosch makes just about everything for cars. Hell, if you showed up at a Bosch plant, you could probably slap together a whole car. So, that means that Bosch, and its CEO, Volkmar Denner, know what they’re talking about. Right now, that’s semiconductors and the fact that Bosch won’t be catching up on production until at least 2022, per Reuters.

Predictably, the pandemic also plays a role here. Because of global vaccine hesitancy, cases have begun to spike all over the globe. Specifically, per CNN, they’ve spiked in Southeast Asia, a hotbed for auto and semiconductor production. In light of that, some plants have had to reduce staff or shut down, further exacerbating the chip shortage. Can’t make semiconductors if no one is there to make them, right?

Even if the chip shortage stopped now, it wouldn’t matter

tsmc's headquarters in Taiwan
TSMC are one of the largest producers of semiconductors | Sam Yeh via Getty Images

However, even if we were able to magically gain access to the materials needed to produce semiconductors, the chip shortage would still last quite some time. It’s a sort of butterfly effect. Silicon is a major ingredient in semiconductors, and right now demand for chips has created a shortage there too. Now, imagine this happening for the other ingredients in the semiconductor recipe. Ergo, chip shortage.

But, let’s say all these issues were to magically be solved. An abundance of labor and silicon. Now, we actually have to make the damn things, and that takes yet more time. Then, we’ve got to ship out the semiconductors. That takes even more time because, hey, they’ve got to cross an ocean to get here. Then, they have to clear customs, which is also being affected by the recent surge in COVID cases. In summary, the delays continue to compound.

Are we there yet?

Semiconductors and microchips on a table in Dresden
New semiconductor production techniques are making headway | Jens Schlueter via Getty Images

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Or, put another way, as long as there is a Coronavirus, there will also, more than likely, be a chip shortage. Unfortunately, the used market is the place to go for new cars, and we’ve all seen how that pans out. Markups and price gouging are the new norm. For now, we’ll all just have to hold on a minute and play that old Playstation 4 for just a little longer.