NARRATOR: The car chip shortage has been a hot topic, especially since it's becoming harder to get your hands on a car. There are many different factors that can lower inventory levels, with the car chip shortage being a significant factor. So keep watching this video to find out what car chips are, why there's a car chip shortage, and how it's affected both the production of new Toyotas and the automotive industry.

Chips, also known as semiconductors or microchips, are tiny complex pieces of technology responsible for containing transistors. They are the base that allows the circuitry to communicate with the machines to form their functions. These highly engineered chips are found in everyday modern electronics like your phone, computer, and electric toothbrush. Believe it or not, despite their tiny size, the process of making them is quite an extensive process. It takes about 12 weeks to build an average semiconductor chip and up to 20 weeks for advanced chips. Only a few places in the world produce them because it takes years and billions of dollars to open up new plants to manufacture the chips.

Well, that's a great question. There are a couple of reasons why there's a shortage. In simple terms, you remember how we were talking about how these chips are placed in everyday modern electronics? With advancements in technology, there are quite a lot of devices that need them. For example, the automotive industry has increased chips with modern technology advances with high-tech features for safety entertainment and performance.

Plus, adding the COVID-19 pandemic into the mix, supply and demand chains were completely thrown off due to shutdowns and quarantines. This made auto manufacturers think that the demand for new cars would drop, canceling the orders. However demand quickly caught up, and manufacturing is still catching up.

Well, no one knows when exactly the manufacturing will catch up. However, there is some debate that it will start to catch up in the middle of 2022 or towards 2023. So, it's a great time to sell that extra car that you don't use. And if you do need to buy a new car, we have trucks full of new Toyotas arriving every day with the option of ordering whatever specific model you want.

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