Semi-conductor Shortage Update

Microchip and Wiring Loom Update with Kit Wisdom

Manufacturers around the globe have experienced a microchip and semi-conductor shortage since 2020, and a shortage of vehicle wiring looms since March 2021, both of which are needed to build new cars. We asked Kit Wisdom, Operations Director here at Tusker, for his view on the shortages and what’s happening as we move into 2023.

So, just to recap, what is the issue, Kit?

For more than two years there have not been enough microchips to match the demand of all manufacturers of items that run on electricity; not just cars, but gadgets, appliances, and computers too. Semiconductors, which are used to make computer chips and integrated circuits, are crucial to most objects that are found in modern life and they are also essential for many of the high-tech features in the new cars being built.

As all cars, not just EVs use a huge amount of wiring inside them to power the many electrical circuits and computers, wiring looms are as essential to production as engines and wheels. For much of 2020 and part of 2021, many of the manufacturing plants that make these were closed, which means that there has been a huge backlog and an increase in demand.

What are microchips and why is there a shortage?

Semi-conductors, or microchips as they are otherwise known, are a key component in the manufacture of all vehicles, electronic goods and the majority of mechanical products currently on sale today. Any item with electronics within it will rely on one, or more likely many semiconductors to operate. Without a supply of these tiny but crucial elements, manufacturers of all products containing them cannot produce goods.

There are several reasons behind the current chip which have come together to create the current crisis.

Most microchips are manufactured in four countries. Taiwan is the world’s biggest producer, with the rest being produced in China, South Korea, and the USA.

In 2018, Chinese manufacturers began to limit their supply of chips, stockpiling their own supplies in the fear of possible economic sanctions from the USA.

When the COVID-19 pandemic began, car manufacturers all ordered fewer chips than normal, as they expected that the public would stop buying new cars.  At the same time as the microprocessor factories were themselves forced to close due to lockdown policies, the immediate rise in everyone across the world going online for work and socialising meant that any excess capacity in chip production was used by electronics firms.

As far more people wanted to buy new cars than had been expected, factories were unable to readjust their production rapidly enough. This problem was made even worse by a drought in Taiwan which left factories without the water they needed for the summer months, and then by severe winter weather in the USA which closed several key factories for weeks at a time.

From last year, the war in Ukraine has meant that the world’s largest producer of neon gas, which is needed to make semi-conductors, has been severely diminished as the country has been brought to a standstill by conflict.

Why is there a wiring loom shortage?

Ukraine is the world’s largest producer of car wiring looms, with 17 factories located in the country, supplying most of the world’s global manufacturers. Because of the war there, most of the factories have had to close, as on top of the danger from bombing, the lack of electricity has halted most of the work.

This has resulted in up to 700,000 vehicle builds being delayed, and the situation is expected to continue into 2023 while companies look to build factories elsewhere.

Combined with the microchip shortage, this means that lead times of new cars have been affected as even though some manufacturers have changed the vehicle specification of models to manage the shortage, others have had to temporarily suspend production of certain models, and overall, deliveries have been delayed.

How will we know which cars are affected by these delays?

Once you have logged into the Tusker site, you can view the anticipated delivery times on our system before you order the car. When an order is placed, and order authorisations have been received, the Tusker team will then confirm the anticipated delivery date and any further delays. You can also check back regularly on the ‘My Car’ page to see the most up to date lead times.

Is it only Tusker who are affected by this?

No, this is a global issue that’s affecting the majority of the automotive industry as well as other consumer technology industries too. Tusker is working as hard as possible to ensure that our drivers are as unaffected as possible, however this is not always possible to guarantee.

What if I need a car quickly?

We understand that some people may not want or be able to wait for their new car. Once you’ve logged into our site, you can visit our ‘Arriving Soon’ page that shows which cars have already been built and are available for delivery – either because they are in the country awaiting delivery, or because we have been given a delivery date for them which is expected really soon.

Although these cars will not have been built to your exact specification, they are brand new cars, built to a good specification, and importantly, they can be delivered to you as soon as we have an order approved and the paperwork returned (which is typically around 4 weeks).

How long will the delays last?

The shortage is constantly being addressed and manufacturers are always looking at alternative options to avoid huge production delays and some are more affected than others. However, the global delays are sadly expected to continue until 2024.

Although production of chips has begun to increase, the situation surrounding wiring looms is still challenging. At Tusker, we have been working closely with all the motor manufacturers to ensure that we are fully aware of any possible delays to the delivery of our cars, and we have been passing this news on to our drivers immediately.

Please visit our FAQs page or contact us if you have any further questions or need advise.