Semiconductor shortage puts the brakes on car industry

ABC News’ Deirdre Bolton explains why a shortage of fingernail-sized microchips is stalling the delivery of millions of new vehicles as Americans prepare to hit the road this summer.
5:27 | 05/20/21

Coming up in the next {{countdown}} {{countdownlbl}}

Coming up next:



Skip to this video now

Now Playing:


Related Extras
Related Videos
Video Transcript
Transcript for Semiconductor shortage puts the brakes on car industry
With pandemic restrictions lifting and summer travel expected to go live car market is skyrocketing but with so much demand. Car manufacturers are having trouble keeping up in large part due to a very tiny but mighty car part. Dieter Bolton brings us the details. Color perfect global storm from Asia to Europe to the US car production slowing significantly and and never seen anything like this demand for cars has never been stronger. The problem at key missing parts. We can't get these little tiny shifts. How are so many components that are targeting. Cool infotainment systems all probable position sensor. These checks semiconductors. May be decisive you're peaking now but air essential for your car for numerous safety functions including power steering. Grapes and tire pressure there and surround fancy infotainment systems. At all we're or. About him cars. While car manufacturers and wait for chips so too does some workers home and without pay. I really couldn't get. Aaron this week is. They knew little thing she does and threw them iron flew combat. Actually let's go Enron work shifts into this you get. Scenario when when and where can this week or and that legacy. Project day easily car. It. Her manufactures can still build out some parts of some cars without the chips and are doing so as much as possible then when the chips are available they're gonna retrofit them. And ship the vehicles out not sickle is the third generation owner of pine build dealership with seven businesses in New Jersey. We usually have something like 500 new units on ground at any given time. We have about seventy units on ground right now. So it has. I look out my window every day and a look in see just black top Andean bear. Rob Blake other dealership owners some auto workers and consumers is also in a holding pattern does so normally there should be a car here. Normally there would be a car here and it's so tight he'd have to walk sideways through it so we can get them all in my view is of this every day and every day I turn around a lookout and think to myself. We're old cars but. You always have to key weighted. In an effort to keep some supply moving to market auto makers are cutting features. One make or installing old fashion speedometer instead of digital winds in one model. Others offering fewer receive ability easy chairs or fewer fuel efficiency measures. The features that people like is. When you have an eight cylinder vehicle when you're riding on the highway it'll shift got four cylinder you save you want gas. They are shipping vehicles without that feature now. This happened the pandemic costs factories to send workers home to avoid getting sick a pandemic shut down all he assembly lines the production at factories. It was already he's still. And part of that was because we weren't allowed to go ND while under. When he went back to work out old. Shooter. Carmakers halted chip orders anticipating a recession thinking there would be less demand for new cars they canceled their orders were their supporters moon there hurdle through the year supply chain. By this time carmakers realize that pandemic made people leave big cities and buy cars to move around smaller towns and cities the chipset are an insult to other industries. Automotive business slower moving industry and then say cellphones and computers them and consumer products in general much how automotive she married. A student or mortar guys and should. All lowland sectors index. So automotive it was kind of lead to the the party. End it there are only a few ships factories in the world to begin west. One Taiwanese company TS MC produces 70%. Of the global auto industry supply. Last month the company pledged nearly three billion dollars in spending to increase capacity at its plants in response to the global shortage. Does it get any errors you can survival no one place. Mother nature also played a role. From the winter ice storms in taxes that took a number of chip factories often lying to a fire at a big supplier in Japan. Jewels of the period elements. Colluded to consider this didn't resolve the usually. What does this mean to you. Higher prices and fewer choices the vehicles are not available on the new car side on the using our side it's still a little difficult because used car prices have gone up so much due to lack of new car inventory so why it. You still look like a deal. Doesn't really feel like a deal anymore. Because the prices are so inflated. First time that our. Experts say there are no quick or easy fixes to the ICC issues or. Editions. At the end an. Easy. All right thank you Deirdre.

This transcript has been automatically generated and may not be 100% accurate.

{"duration":"5:27","description":"ABC News’ Deirdre Bolton explains why a shortage of fingernail-sized microchips is stalling the delivery of millions of new vehicles as Americans prepare to hit the road this summer.","mediaType":"default","section":"ABCNews/Technology","id":"77768913","title":"Semiconductor shortage puts the brakes on car industry","url":"/Technology/video/semiconductor-shortage-puts-brakes-car-industry-77768913"}