Car companies across Europe and Japan including Volvo, Volkswagen, Honda and Nissan have warned that the battle between the Netherlands and China over control of the chipmaker Nexperia could hit production at factories.
Last week’s decision by the Dutch government to take control of the Chinese-owned chipmaker, which is based in the Netherlands, has sent shock waves across the car industry, which is already facing potential shortages of products such as magnets amid China’s latest restrictions on rare earths exports.
The Hague said at the time that it was taking control of Nexperia to safeguard Europe’s supply of semiconductors and that it had invoked a cold-war era law to take effective control of the company following concerns raised by the US about the Chinese owner, Wingtech.
That decision caused an immediate rift with Beijing, which banned all exports from the chipmaker, escalating the already tense relations between China and the US before a potential meeting between Donald Trump and Xi Jinping next week in Korea.
The Japan Automobile Manufacturers Association, whose members include Nissan, Toyota, Honda and Mazda, said on Thursday it had received a warning from Nexperia that chips could now be in short supply, potentially holding up manufacturing.
“The chips manufactured by the affected manufacturers are important parts used in electronic control units, etc, and we recognise that this incident will have a serious impact on the global production of our member companies,” the association said. “We hope that the countries involved will come to a prompt and practical solution.”
The German car trade association the VDA has also warned of serious consequences for an industry already battling stiff competition from Chinese EV manufacturers.
Its president, Hildegard Müller, said: “The situation could soon lead to significant production restrictions – or even a stop in production – if the interruption of Nexperia chip deliveries cannot be resolved in the short term.”
She revealed that VDA members and suppliers had received a notice on 10 October from Nexperia “describing a sequence of events that has led the company to no longer be able to fully ensure the supply of its chips to the automotive supply chain”.
Such is the urgency that the VDA had a meeting with the German economy minister, pushing the federal government and the European Commission for “quick and pragmatic solutions”.
In Japan, a Nissan spokesperson said: “We are assessing the situation and will take appropriate measures as needed.”
Nexperia produces large volumes of semiconductors in the Netherlands, which are widely used in the automotive industry and consumer electronics. The majority are packaged in China, from where they are sold back into global industries.
The chief executive of Volvo Cars, Håkan Samuelsson, said the Swedish group, owned by China’s Geely, was not seeing any immediate problems itself, but said he expected rivals to be hit.
“I think there will be some factories shut down,” he told the Financial Times on Thursday. “You always have to be a bit smarter than the rest of the pack so you are not the one that has to shut down the factory.”
The UK industry body the Society of Motor Manufacturers and Traders said chip supply problems were the last thing the industry needed.
“While the sector has made efforts to diversify its supply chains, if not resolved quickly this issue has the potential to severely disrupt vehicle production and market supply.” It said.
“SMMT is actively monitoring the situation and is in contact with members and government to understand the scale of any impact and measures that might be taken to mitigate it.”
Germany’s Volkswagen warned on Wednesday that its car production could also be hit. VW, Europe’s biggest carmaker, confirmed that some Nexperia components are used in its vehicles but said production was currently unaffected. “However, given the dynamic nature of the situation, an impact on production cannot be ruled out in the short term,” added the company, whose 10 brands include Audi, Seat and Skoda.
The German economy ministry said on Wednesday it would have a call with car industry bosses.
