A recent advisory from a coalition of major automakers has brought attention to a looming crisis in U.S. auto production. The group, which includes the Alliance for Automotive Innovation, warns that the ongoing chip shortage linked to Nexperia could significantly disrupt manufacturing.
Nexperia Chip Shortage Concerns
On October 16, 2023, the Alliance for Automotive Innovation highlighted an urgent challenge facing the automotive industry due to a chip supply disruption. Nexperia, a Dutch chip manufacturer, informed suppliers last week that it could no longer assure timely deliveries of its components.
Impact on U.S. Auto Production
This situation is projected to have serious effects on U.S. auto production as soon as next month. Several automakers have expressed concerns over potential disruptions, which could extend beyond the automotive sector. John Bozzella, CEO of the Alliance for Automotive Innovation, emphasized the significance of this issue, stating, “If the shipment of automotive chips doesn’t resume quickly, it will have a spillover effect in other industries.”
- Key automakers involved include General Motors, Toyota, Ford, Volkswagen, and Hyundai.
- Nexperia chips are vital for the production of auto parts and vehicles in the U.S.
Background on Nexperia’s Control Issues
The Dutch government recently took control of Nexperia, citing security concerns regarding technology transfer to its Chinese parent company, Wingtech. This move, prompted by rising pressure from the U.S., reflects ongoing tensions over technology and trade.
The shift in control was formally executed on September 30, and is part of a larger trend of tightening export controls affecting companies owned by entities on the U.S. Entity List. In late December 2022, the U.S. included Wingtech on this list, further complicating Nexperia’s operations.
Regulatory Actions and Future Risks
On October 4, the Chinese commerce ministry issued an export control notice restricting Nexperia China from exporting specific components. This action raises concerns not only for the automotive industry but also for the tech sector that relies heavily on chip supplies.
While companies like Volkswagen and BMW have not yet reported significant production disruptions in Europe, they are actively assessing their supply chains to mitigate associated risks.
As the situation develops, the urgency for a resolution remains critical to ensure the stability of U.S. auto production and its associated industries.
