Global automakers chase chips after Nexperia export restriction
Global automakers are urgently seeking chips and consulting with suppliers to assess their stock levels, as an escalating semiconductor supply crisis linked to Dutch company Nexperia jeopardizes car production throughout the industry. Beijing has prohibited the export of Nexperia’s products from China following the Dutch government’s takeover of the chipmaker last month. This action was taken due to concerns regarding the potential transfer of technology to its Chinese parent company, Wingtech, which has been identified by the US as a possible national security threat. Nissan Motor and Mercedes-Benz are among the automakers grappling with an unpredictable supply situation, with Nissan stating it has sufficient chips until the first week of November — merely days away. Honda has halted production at a facility in Mexico as of Tuesday and has begun to modify its production operations in the US and Canada, according to a spokesperson.
A government official in Brazil has stated that some manufacturers may be forced to cease operations within two to three weeks if the crisis persists. Nexperia’s chips are extensively utilized in automotive components, presenting the supply crunch as the latest hurdle for an industry already contending with US tariffs and Chinese restrictions on rare earth exports. “It’s a big issue,” Guillaume Cartier stated . “At this time, we lack complete visibility.” Cartier stated that the automaker was “okay to the first week of November” regarding chip supply. Even if automakers had learned a lesson from the COVID-era shortage and stockpiled chips, they remained dependent on their suppliers, including the smaller ones, he said. While visibility was achievable with the largest “Tier 1” suppliers, it became increasingly challenging as one moved further down the supply chain, he stated.
Marc Winterhoff stated that the company’s engineering team has been exploring alternative supplies, and the effect on production plans has been deferred. “It’s developing in the right direction,” he stated. A spokesperson stated that General Motors is addressing the issue and has not experienced any impact on factory output. “It goes without saying that we’re scouring the world to look for alternatives,” said Ola Kaellenius, who added that the German automaker was “covered” for the short term. Kaellenius stated, “This is different from the last chip crisis because now the issue is rooted in politics and will require a political solution.” This serves as a reminder that global supply chains render manufacturers susceptible to international trade tensions. “In a modern high-tech car, you have pretty much all five continents inside,” Kaellenius stated.
“Automakers are now looking at production stoppages or the use of alternative parts to ride out shortages,” said Klaus Schmitz. However, in the end, both companies and governments will seek to engage with China in order to reach a resolution. “Undoubtedly, the companies will now engage in negotiations with China. Governments are negotiating with China, most prominently the US,” said Schmitz. “The true consequences must be assessed, yet it is highly probable that the situation is quite critical.”
