Chips...

 

Potato or chocolate?  Well, in a cookie, the choice is obvious, but I'm talking about computer chips in this post.  They are in so many things we take for granted: of course in all our devices like computers, iPads, and phones, but also smart devices like TVs, microwaves, and coffee makers.  Cars are full of computer chips to handle all the features we've come to appreciate.  And now, who hasn't heard of the "chip shortage" car manufacturers are dealing with?

It is a real issue in these unusual times; to the point where some car manufacturers are making vehicles to the 95% completion point, then putting them in huge lots to be finished when they can get their hands on more computer chips.  The number of vehicles being manufactured in 2021 is down dramatically - not because of less consumer demand, but because the car makers can't buy enough computer chips.  If anything, the demand for new and late model used vehicles is up significantly... meaning dealers can tack on "Added Dealer Profit" fees on cars, increasing the price by thousands of dollars.  A price increase that gets the buyer no added value, just a higher price.

The problem is part pandemic related, part supply chain.  In 2020, when the need to "drive to work" dropped off with people working from home, car manufacturers cut back production.  Chip manufacturers switched over production to things like phones, tablets, smart home devices... and when the car manufacturers ramped up production again, the chip manufacturers had "moved on", making even smarter chips for all the devices we use... chips that are more profitable than the relatively dated chips used in most vehicles.  Depending on the vehicle, there may be hundreds of chips in your car.

Reading some articles yesterday, car manufacturers are adapting by eliminating things that buyers have come to consider "basic necessities" on their vehicles: things like heated seats and touch screens.  General Motors announced that they are eliminating heated seats and steering wheels on all but their most premium vehicles.  BMW is eliminating touch screens on most models.  If you have a new vehicle on order, they may be giving you a credit for those items eliminated.  This seems like a big step backwards.  We may once again see "roll up" windows; yes, there's are chips in the mechanism for that one-touch up and down feature.

Meanwhile the price for new and late model used vehicles continues to climb.  This is still on my mind, of course, due to being "pushed" into needing to buy a car recently.  No regrets, so far, as we are really enjoying the Equinox... but, there are a lot of electronic features for safety and comfort... and that is a lot of chips.