The auto industry has been hit hard with the shortage of semiconductors, as many new cars have been scarce and various used vehicles have been switched around random dealerships in an attempt to gain profit.

Semiconductors are the brains of the modern automobile and have been in use since the late 1960s. Semiconductor devices are used for critical functions, such as sensing, safety features, power management, displays and control of the vehicle. Most new cars have between 50-150 chips.

COVID-19 offset automakers for the worst and put businesses in danger. Due to lockdowns and other pandemic responses starting in March 2020, dealerships drastically lowered inventory requests for new vehicles. Container ships unable to get into ports resulted in waves of ships sitting off the coast waiting for a spot to unload.

Anyone that has tried to buy a new car lately has probably been surprised by prices. The manufacturer’s suggested retail prices (MSRPs) are skyrocketing due to dealership markups because of high demand and low inventory. This makes it extremely hard for customers to get a certain specification or custom vehicle.

Dealerships across the country are selling vehicles out of their typical range because there is so little available. Sunset Honda of San Luis Obispo displayed a 2012 Porsche Carrera S right in front, as well as a 2018 Mercedes C300 further down the lot. Unrelated or rare vehicles at certain dealerships are just the result of the semiconductor chip shortage, a crucial need for inventory.

This has led many to the used car market, where there is also a shortage due to many not buying new cars. Used car prices are rising, and auto executives are estimating production will not return to pre-pandemic levels until 2023. Chipmakers have said it could take upwards of one to two years for chip production to meet current demand.