This move is unlikely to affect the ownership experience of customers as they don’t lose their smart keys often
Chip shortage is real. We all know this by now. But what we don’t know is how long this will plague the automotive industry. We reckon that the chip shortage will affect the majority of 2023 and even 2024. Until then, automotive manufacturers struggle to get hold of the stocks as three is a cut-throat competition across various fields.
Like every other mass-production automotive company, Hyundai has been suffering from a chip crisis too. To mitigate the shortage, Hyundai has taken some measures that will reduce its chip dependency. Dealer sources tell Rushlane that Hyundai is dispatching only one smart key accompanied with a standard key that is devoid of electronics.
Hyundai’s chip shortage crisis
All Hyundai cars in high demand are being treated with this strategy. This helps Hyundai to strike a balance between offering limited convenience features to their customers and not offering any features at all. Hyundai models to be affected by this move, are Creta (‘S’ variant and higher), Alcazar (all variants) i20 (Asta and higher) and lastly, i20 N Line.
This critical measure by Hyundai is only temporary and Hyundai will dispatch a second smart key to customers after a time period of around 6 months. Hyundai will supply the key to dealers who will program the key with the car by a service team either by home visit or at a workshop visit. We have seen Tata Motors implement a similar strategy.
What is Semiconductor Chip
Chips are processors made of semiconductors that act as conductors and insulators that process signals across their terminals. It is used in almost every single electric and electronic device and appliance and even in machinery including automobiles. With the rising features list, cars are getting more and more electronic goodies and every single one of them needs processors to process data.
These processors are usually manufactured in high-tech foundries by TSMC and Samsung. TSMC holds more than 50% of the semiconductor business in the world. Due to the pandemic, raw material supply was sabotaged and the demand for phones, laptops and tablets skyrocketed. A combination of high demand and low production and supply led to the semiconductor shortage which persists even today.
Causes of Chip shortage
There are a lot of factors contributing to this global crisis. A major reason is the online schools and meetings demanding a huge surge in production of phones, laptops and tablets. This surge happened at the time when chip production was either being halted or halved due to the unforeseen Covid-19.
Rise in the number of crypto miners is another reason for this crisis. America’s ban on Chinese equipment is also a reason, as China was a major component supplier. Even though we don’t know all the reasons, we can speculate that the chip shortage is here, and it is here to stay for a while.