Experts say automakers use chips with older process nodes because they need long lead times for testing, which is at odds with how chipmakers prefer to operate
Adam Ismail / Jalopnik : Tweets: @lanebajardi Tweets: Lane Bajardi / @lanebajardi : You've heard there is a “chip shortage” that is sending the price of new cars and SUVs to the moon, but it is more complicated than you may have heard. I'm better informed after reading this @Jalopnik article by @pioneerspine, so I thought I would share. https://jalopnik.com/...
Context & Ripple Effects
This piece lands mid-arc in a year of worsening auto-chip pain: January's laptop and 5G demand boom colliding with a car-sales recovery set the shortage in motion, and by September Bloomberg counted 7.7M cars cut from global production plans, a $210B sales hole. What Jalopnik adds is the structural why — automakers deliberately spec chips on mature process nodes because long testing and validation cycles demand proven, stable silicon.
First-order effects
- That design choice makes carmakers dependent on exactly the legacy-node capacity that is scarcest — with lead times already stretched to roughly 21–22 weeks per the related coverage, sourcing has become what experts call a lottery.
Second-order effects
- The dependency is forcing a relationship overhaul: automakers that traditionally bought through parts suppliers are now establishing direct ties with chipmakers, and competition for aging fabrication equipment has tightened as buyers chase secondhand machines running older processes.
Third-order effects
- If the pattern holds, automotive silicon consolidates around long-term contracted supply of mature-node capacity rather than spot-market purchases — locking in a two-tier chip economy where leading-edge and legacy fabs run on different commercial logic.
The trend: The chip shortage is exposing a structural split between leading-edge and mature-node supply, pushing automakers from arm's-length purchasing toward contracted legacy-capacity relationships.