Nexperia Halts Chip Supplies to China Amid Global Car Production Threats
A major blow has struck the global car industry as Nexperia, a leading EU-based automotive chipmaker, has suspended supplies to its Chinese factory. This move is part of an escalating trade war that threatens to cripple production lines at car manufacturers worldwide.
The suspension comes on the heels of the Netherlands' national security laws being used to take control of Nexperia in September, citing concerns over Wingtech Technologies, the company's Chinese owner, shifting intellectual property to another firm it owns. The Dutch government removed Wingtech Chairman Zhang Xuezheng as CEO, sparking a reaction from China which halted exports from all Nexperia factories in the country.
Nexperia has explained that the suspension is due to "failure to comply with agreed contractual payment terms" for shipments to its Dongguan factory in Guangdong Province. However, industry insiders warn that this move could have far-reaching consequences for global car production. Many of Nexperia's European products were previously shipped to China for packaging and distribution, making a halt to supplies particularly damaging.
Car manufacturers are already bracing for the worst, with Nissan saying it has enough chips to last until mid-November, while Honda has suspended production at a Mexican plant. Mercedes-Benz stated it was "covered" in the short term but is seeking alternatives, while Volkswagen warned that its annual profit targets could be at risk without sufficient chips.
However, Toyota, the world's largest carmaker, seems less concerned, stating it is not facing major supply problems even if it could eventually face a hit to production. The EU is now set to engage in further discussions with China over its ban on Nexperia exports and restrictions on supplies of rare earth minerals.
In response to the crisis, the European Commission is pushing for a new Chips Act that incorporates key lessons from the current crisis, including better visibility of chip stocks, investment in supply despite cost, and reserve stocks. Industry associations are urging swift resolution to the situation, warning of "significant production restrictions" or even "production stoppages" if a solution cannot be found soon.
The Nexperia halt is set to have significant implications for UK car manufacturers, with British operations potentially being affected due to the company's Manchester factory producing some chip wafers. The incident serves as a stark reminder of the fragility of global supply chains and the need for cooperation between nations to mitigate such crises.
A major blow has struck the global car industry as Nexperia, a leading EU-based automotive chipmaker, has suspended supplies to its Chinese factory. This move is part of an escalating trade war that threatens to cripple production lines at car manufacturers worldwide.
The suspension comes on the heels of the Netherlands' national security laws being used to take control of Nexperia in September, citing concerns over Wingtech Technologies, the company's Chinese owner, shifting intellectual property to another firm it owns. The Dutch government removed Wingtech Chairman Zhang Xuezheng as CEO, sparking a reaction from China which halted exports from all Nexperia factories in the country.
Nexperia has explained that the suspension is due to "failure to comply with agreed contractual payment terms" for shipments to its Dongguan factory in Guangdong Province. However, industry insiders warn that this move could have far-reaching consequences for global car production. Many of Nexperia's European products were previously shipped to China for packaging and distribution, making a halt to supplies particularly damaging.
Car manufacturers are already bracing for the worst, with Nissan saying it has enough chips to last until mid-November, while Honda has suspended production at a Mexican plant. Mercedes-Benz stated it was "covered" in the short term but is seeking alternatives, while Volkswagen warned that its annual profit targets could be at risk without sufficient chips.
However, Toyota, the world's largest carmaker, seems less concerned, stating it is not facing major supply problems even if it could eventually face a hit to production. The EU is now set to engage in further discussions with China over its ban on Nexperia exports and restrictions on supplies of rare earth minerals.
In response to the crisis, the European Commission is pushing for a new Chips Act that incorporates key lessons from the current crisis, including better visibility of chip stocks, investment in supply despite cost, and reserve stocks. Industry associations are urging swift resolution to the situation, warning of "significant production restrictions" or even "production stoppages" if a solution cannot be found soon.
The Nexperia halt is set to have significant implications for UK car manufacturers, with British operations potentially being affected due to the company's Manchester factory producing some chip wafers. The incident serves as a stark reminder of the fragility of global supply chains and the need for cooperation between nations to mitigate such crises.
just heard about Nexperia suspending supplies to China 
this is huge for car manufacturers, like Nissan and Honda who are already bracing for the worst 
what's really worrying is that it could lead to production stoppages or significant restrictions if a solution can't be found soon 
i mean, china's been complaining about this wingtech guy taking over nexperia for ages now but still... can't they just sort it out already? 
anyway, this is gonna hit uk car manufacturers hard, my mate works at a manchester factory and he's saying it's gonna be chaos if the supply chain gets interrupted 
but for everyone else, it's gonna be a real challenge. i think eu should've been more prepared for this though... like they knew wingtech was being shady and they didn't do anything about it 
. But it's not going to be easy - there are a lot of different interests at play here and it'll take some serious effort to sort things out. I hope they can find a solution soon before we're stuck in the middle of another chip shortage crisis 
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. If one piece of the puzzle breaks, the whole thing comes crashing down.
. We need more cooperation between nations to prevent these kinds of crises from happening in the future. It's like, let's work together to make a better world 
!
the EU and China are playing chicken with the global car industry and it's like they're not even thinking about all the people who rely on these companies for their jobs 
it's like a game of economic whack a mole where everyone gets hurt 
they need to negotiate with china and find a way to get nexperia back on track ASAP 
so yeah, this is like super bad news for car makers worldwide... 
Mercedes-Benz is covered short-term but can't rule out production stoppages if they don't get more chips soon... 
Toyota seems like a total outlier here tho, not even worried about it... 
50% of global car makers rely on EU-based chipmakers, so this is gonna cause some huge problems for them... 
The EU's new Chips Act might just save the day tho... 
apparently they're pushing for better chip stock visibility, more investment in supply chains, and reserve stocks to mitigate situations like this... 
40% of car production relies on chips made by companies like Nexperia, so it's not just a small industry problem... 
global supply chain fragility is real... 
. It's not just cars that are gonna get affected, either - I mean, have you seen the state of UK car manufacturing lately? It's already pretty rough 
. We need some big players like Toyota to step up and show us how it's done 
. And what about all these new chip laws being proposed in Europe? That's some cool thinking 
- better visibility, investment, and reserve stocks... sounds like a solid plan to me! 
But seriously, folks, we need to take care of our global supply chains before things get outta hand 
.
i mean nissan is good tho lol they have chips until mid nov but honda's plant is halted idk what's up with that 
anyway mercedes benz is trying to find alternatives which is smart move 
but toyo is low key confident about their chip supply lol what a difference maker 
european commission needs to step in and get this chips act passed ASAP 
. Toyota's like "meh, we got this" but come on, you're basically saying that every other company is just sitting ducks waiting for the other shoe to drop 
. The EU Commission's pushing for some new Chips Act thingy, which sounds great and all, but what's taking so long? 
car makers are gonna be in big trouble 
the eu needs to step up its game with this new chips act or we'll be seeing a lot of production stoppages 
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. But can't we just invest in some chip wafers already 
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We need global cooperation to get through this supply chain crisis, not more trade wars 
Can you believe this? Car manufacturers are so used to playing with fire they didn't even realize their chips were on fire too 
! Just kidding, it's not funny at all... or is it? 
Anyway, the global car industry is in a bit of a pickle now. I mean who needs cars when you have a good excuse to stop production and blame it on chip shortages? Nissan has enough chips to last till mid-November, but Honda can't even get that far, what's up with that? 
so this is what happens when you try to play hardball with trade wars 
I mean, I'm not saying China's fault, but Netherlands' national security laws being used as an excuse to take control of Nexperia is pretty shady.