Chips Ahoy: Late-Year Stumble for Microchip Supply

Matthew Guy
by Matthew Guy
chips ahoy late year stumble for microchip supply

We’ve spilled plenty of digital ink on these virtual pages about the so-called ‘chip shortage’, a conundrum of the world’s automakers that cropped up in the early days of the pandemic and has stubbornly caused headaches ever since. While the situation may be improving, recent numbers show production levels continue to be impacted – even at this late stage of the 2022 calendar year.

According to a study by AutoForecast Solutions reported by Automotive News, over 150,000 vehicles have been slashed from global production for the coming week thanks to a shortage of chips – with most of that shortfall happening at North American plants. This follows a week or more of relatively uninterrupted production, say the eggheads, who note no unscheduled reductions in output were recorded during that spell for one of the first times in ages.

This week’s hiccup is a reminder to all hands that supply-chain irritants remain a reality, despite the best efforts of industry players to either work around the problem or ignore it with positive PR spin. Many companies have simultaneously bolstered their supply of microchips whilst also revising their forward-looking expectations, meaning news should be less grim next year. According to AutoForecast, whose job it is to estimate these things, roughly 4.3 million vehicles have been eliminated from factory plans across the globe, a sum which is in addition to the 10+ million which vanished in 2021 due to a lack of chips. Note the hero image up top is just one we had on hand and is not meant to imply that the OEM is having a hard time with chips.

It’s been a delicate dance for many OEMs, with some choosing to eliminate or restrict certain features on their vehicles in order to maximize the number of vehicles they can produce. If removing heated seats and steering wheel locks from a Silverado saves four chips, for example, that’s four more chips Chevy doesn’t have to source and can now allocate to another unit of production. Multiply this by hundreds of thousands of trucks and you see how such an approach can quickly add up.

Just be sure to check if the heated seats actually work when you’re looking at a five-year-old Silverado in 2026, ok?

[Image: Stellantis]

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3 of 18 comments
  • 28-Cars-Later 28-Cars-Later on Dec 13, 2022

    "According to a study by AutoForecast Solutions reported by Automotive News, over 150,000 vehicles have been slashed from global production for the coming ***week***"

    150,000 x 52 weeks = 8.7 million.

    Klaus sez: "Excellent".

  • George skakel George skakel on Dec 13, 2022

    I used to sell auto parts to OEMS and after market for a large old auto parts firms. The big 3 (when there was a big 3 ) were all complete pigs. Not only did they encourage competition in our products and gave away our secret sauce, they even manufactured the same parts themselves and made sure our margins were just big enough for us not to leave the business. I would not be surprised that the same approach was used in the chip business. Problem is LOTS of different industries can use the chips. If I were in the chip business the auto boys would be at the bottom of the list of folks to call on. In other words pay up or go pound sand.

    • Jeff S Jeff S on Dec 14, 2022

      George skakel--Truer words were never spoken. Agree. The automakers brought this upon themselves and now turn the blame on the chip makers and other suppliers while many dealers markup their inventory above MSRP and expect buyers to be grateful for the opportunity to buy their vehicles.

  • Raven65 This was basically my first car - although mine was a '76. My Dad bought it new to use as a commuter for his whopping 15-minute drive to work (gas is too expensive!) - but it was given to my sister when she left for college a couple of years later - and then she passed it down to me when I got my license in 1981. It was a base model... and I mean BASE... as in NO options. Manual 4-speed (no o/d) transmission, rubber floor (no carpet), no A/C, and no RADIO (though I remedied that within a week of taking ownership). Dad paid just over three grand for it. Mine was a slightly darker shade of yellow than this one (VW called it "Rallye Yellow") with the same black vinyl "leatherette" seat covers. Let me tell you, the combination of no A/C and that black vinyl interior was BRUTAL in the SC summers! Instrumentation was sparse to say the least, but who needs a tach when you have those cool little orange dots on the speedo to indicate redline in gears (one dot for redline in 1st gear, two dots for redline in 2nd gear, three for 3rd). LOL! It wasn't much, but it was MINE... and I LOVED it! It served me well through the remainder of high school and all the way through college and into my first "real job" where I started making actual money and finally traded it in on a brand new '89 Nissan 240SX. They gave me $300 for it!!!. I wish I still had it. Thanks for the trip down memory lane!
  • Analoggrotto Telluride is still better
  • Arthur Dailey So how much more unreliable is a 50 year old Italian made vehicle in comparison to a 5 year old Italian made vehicle? After 50 years wouldn't most of the parts and areas most prone to failure have been fixed, replaced and/or addressed?Asking for a friend? ;-)
  • Pig_Iron This is happy news for everyone in the industry. 🙂
  • Dukeisduke Globally-speaking, in August, BYD was the fourth best-selling brand name. They pushed Ford (which had been fourth) to sixth, behind Hyundai.