WASHINGTON, D.C. – Supply chain issues that resulted in semiconductor chip shortages have held the automotive industry in its grip throughout the COVID-10 pandemic, reducing the output of new vehicles and driving reliance on used ones to fill the void, with prices for both being driven up in the process due to overall demand.
However, reports indicate that inventories of semiconductor chips have been slowly building back to pre-pandemic levels, but despite this being the case, vehicle manufacturers have continued to increase their demand for electronics, but their reliance on one specific type of chip, experts say, will result in car inventory levels continuing to not meet the needs of the public for the near future.
90 nanometer chips – relatively old by today’s standards – are a key component of approximately 67 percent of new cars and trucks that are built these days, and have been for some time; the reason for this is their compatibility with a variety of different vehicle controllers and electric powertrains, including electric drive inverters and actuators.
Companies that manufacture 90 nanometer chips have ramped up production as best as they can as of late, but experts say the compound annual growth rate will remain at about 5 percent until 2026, which is not enough to overcome the current mismatched demand-versus-supply ratio.
As for why newly-built vehicles continue to rely on a relatively “mature” chip instead of redesigning their systems to accommodate newer – and more readily available – electronics is simply a matter of money; going back to the drawing board and moving away from time-tested tech would require a significant degree of effort and development costs that many automotive companies are not yet willing to incur.
Auto makers are also facing competition for 90 nanometer chips from other companies that create consumer products, and sometimes these companies are receiving preferential treatment when it comes to chip bidding since they tend to order them in much greater volume. This is also a contributing factor to the current chip shortage in the vehicle manufacturing industry.
To ease the issues currently impacting new vehicle construction, and to ensure a situation like this doesn’t come up in the future, experts are suggesting that auto makers collaborate on creating new, sharable technology that would essentially future-proof vehicles for years to come and protect them shortages of this nature going forward.
Reports indicate that some companies – including Ford, GM, Volkswagen, and Mercedes-Benz – have already taken tentative steps forward in this regard.
Christopher Boyle is an investigative journalist, videographer, reporter and writer for SEARCHEN NETWORKS® as well as other independent news and media organizations in the United States. Christopher works on a wide variety of topics and fields, has been featured in print and online in a variety of publications, from local to national, and helps keep a keen-eye on what’s happening in the automotive world for Auto Buyers Market.