Quote:
Originally Posted by vreihen16
That logic is backwards from what I have heard from my sources with connections to the automotive ECU industry. The easy-to-make chips used in cars are 10-20 year-old technology, and were so easy/cheap to make that no fab wants to keep the tooling around because there is no profit in them. There's way more money to be made by building new fabs to make the latest and greatest tiny chips on thinner wafers. When the auto manufacturers cancelled their chip orders at the start of COVID-geddon, the chip companies tore down the lines for the old non-profitable stuff and started converting them to make the new/profitable stuff.
I would not expect to see the automotive chip crisis resolve itself until the automakers re-design their ECUs to use more modern processors.....
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Lol that's kind of what happened to the agave farms in Mexico. Tequila companies didn't want to pay more for the agave, so farms switched to more profitable crops and now there is an agave shortage. That's why even high end Tequila doesn't taste the same this year.
We are both looking at the same problem: cheap easy to make chips. What will happen is that eventually these chips will get made simply because car manufacturers have cars sitting around WAITING for them. The demand is there, so chip manufacturers are at an advantage to increase the price of these chips and car manufacturers will have little choice but to pay up. What happens then is a flood of new cars that were already made that now have chips and can be sold. That sucks for the manufacturers because they are going to pay for more chips, but the inventory will actually cause a drop in prices after a short time.
Granted, dealers will try and mark-up for as long as they can until their inventory will just force them to sell cars.
Prices will stabilize and all these people who thought paying $10k over on a new Kia will start to feel the hurt when they owe double that over what it's worth. Then, you will see an influx of lease returns and reduction of lease buyouts because residuals will be much higher than market value. The secondary market will take a huge hit and cars will be dirt cheap.
My new plan is to get rid of as many cars as I can now, and buy at the end of next year when prices plummet.