The Vehicle Chip Shortage: What Is It?

A mechanic using a laptop to diagnose an issue with a vehicle.

Since the first Model T rolled off the Ford production lines, automakers around the globe have been striving to make their vehicles faster, safer, and more affordable for the everyday commuter. To achieve this, the automotive industry as a whole began to incorporate more and more pieces of technology into their vehicles, helping to provide better performance and safer, inclusive drive. One item that has helped pave the way for this type of innovation is the computer chip.

However, the COVID-19 pandemic recently brought on a semiconductor shortage affecting the global supply chain, including the automotive industry. States such as Michigan, Kentucky, and Kansas are just a few of many where automakers have been forced into production shortages. With a significant loss of production, prospective car buyers should understand what this chip shortage may mean for the everyday driver.

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What Is a Vehicle Chip?

To understand how the chip shortage can impact your vehicle, it’s crucial to learn just how vital these pieces of engineering are to any modern car, truck, or SUV on the road today. As part of a complex system, a vehicle’s chip is made of thousands of semiconductors that are necessary to allow the vehicle’s internal computer to function properly. Without a working computer, essential functions such as regulating internal temperatures, electricity outputs, opening and closing valves, and other aspects inside a vehicle will fail to work. Simply put, a vehicle chip allows your car, truck, or SUV to move. 

For modern cars, measurements on the dashboard, such as tire pressure, oil levels, engine temperature, and many other features, are controlled by the computer and chip. With the chip shortage, high technology vehicles are essentially stuck on the production line until more shipments come in. Cars unaffected by the chip shortage will often be produced before the early 1990s, when most automakers began using them more widely during production. 

If you own an older vehicle that does not require a chip, ensure you stay up to date on any essential maintenance with an EnduranceAdvantage™ auto protection plan to avoid unexpected and potentially costly repairs. EnduranceAdvantage offers up to $3,500 in regular maintenance coverage to help keep your vehicle on the road for longer. Each plan includes essential services such as oil and filter changes or tire rotations covered – at no additional cost.

Why Is There a Chip Shortage?

When the COVID-19 pandemic began in March 2020, many daily commuters transitioned to a more work-from-home basis. Due to this change, automotive makers started to see orders decline, which resulted in the decrease of semiconductor orders as well. However, while automotive sales declined, other industries saw increased demand for their products, such as computers, gaming consoles, personal devices, and other items that also use the same semiconductor technology to make their products work. 

With this change of “supply and demand,” the chip manufacturers started to transition away from production for vehicles and instead focused on the other areas seeing increased sales. Once restrictions began to ease in many areas of the country and around the world, increasing demand for new vehicles without the necessary production or supply chain to back up the demand, resulting in the shortage we see today. New vehicles aren’t the only vehicles impacted by the shortage, as many prospective car buyers also have to deal with an increase in pricing for used vehicles.

Common Errors with Faulty Chips

Most modern popular car brands such as the Jeep Wrangler or many Nissan models use chips in their vehicles that provide most of the advanced features their drivers love, such as touchscreen displays in the center console. However, with such a heavy reliance on these chips, there are unexpected auto repairs that vehicle owners may run into.

Signs of a failing chip can include:

  • Electrical Problems
  • Check Engine Light Comes On
  • Vehicle Dash Giving Odd Readings
  • Engine Stalling/Misfiring
  • Vehicle Won’t Start
  • Overall Performance Issues

Issues with your car’s infotainment system can also be a common sign of an issue with your vehicle’s chip, though it is best to get the issue diagnosed at a licensed repair shop.

While the repair costs for chips can range anywhere from a couple hundred to over $1,000 depending on your vehicle make and model, replacement costs as a whole have risen during the pandemic due to the shortage. Keep your vehicle protected from unexpected breakdowns and repairs that your auto insurance provider might not cover with a vehicle protection plan.

Vehicle protection packages, such as EnduranceAdvantage, offer critical component coverage and up to $3,5000 in regular maintenance coverage. Customers also receive 1 year of free Endurance Elite Benefits with the purchase of any auto protection plans with even more perks, such as 24/7 roadside assistance and key fob replacement.

Protect Your Vehicle with Endurance

Auto repairs never happen at a convenient time. Whether your vehicle is impacted by a faulty chip or an unexpected breakdown, a vehicle protection plan from Endurance can help. By covering your vehicle’s most vital components, such as your engine, transmission, and more, you can rest easy knowing you’re protected from costly repair bills. 

Request a free, no-obligation quote to learn more about an Endurance auto protection plan that fits your needs and budget. Visit our Learning Center to find more informative articles on topics, such as expert auto tips, maintenance FAQs, and more.

A Vehicle Service Contract (VSC) is often referred to as an “auto warranty” or an “extended car warranty,” but it is not a warranty. A VSC does, however, provide repair coverage for your vehicle after the manufacturer’s car warranty expires. A VSC is a contract between you and a VSC provider or administrator that states what is a covered repair and what is not. Not all vehicles qualify for coverage; Endurance does not offer VSCs in California.