Nexperia-Linked Chip Shortages Ripple Through Global Auto Supply Chain, From Germany To Japan

One day after German tabloid newspaper Bild reported that Volkswagen had suspended production of the Golf at its Wolfsburg factory due to a worsening semiconductor shortage caused by a supply stoppage of Nexperia chips, the Dutch chipmaker, recently seized by the Netherlands government, warned Japanese automakers on Thursday that it may no longer be able to guarantee chip supply. The chip crisis spreading from Europe to Japan has set off alarm bells across the industry.

Bloomberg reports that the Japan Automobile Manufacturers Association (JAMA) has confirmed that its members, Toyota, Nissan, and Honda, have received warnings from Nexperia about chip supply woes and are working with customers to mitigate disruptions. 

JAMA cautioned that chip shortages could have a “serious impact” on global auto production and urged governments to reach a “prompt and practical solution.”

“The chips manufactured by the affected manufacturers are important parts used in electronic control units, etc., and we recognize that this incident will have a serious impact on the global production of our member companies,” JAMA wrote in a statement, adding, “We hope that the countries involved will come to a prompt and practical solution.”

Earlier this month, the Dutch government escalated tensions with Beijing by seizing Nexperia under a 1952 law aimed at securing domestic control over semiconductor supply, following U.S. pressure to curb Chinese ownership ties. Nexperia’s Chinese parent, Wingtech Technology, and its China unit have publicly disputed the seizure. 

The move escalates frictions between Western countries and China over access to high-end technology such as advanced semiconductors and critical raw materials. China has hit back by restricting rare earth mineral exports to the U.S. as these troubling developments appear to be unfolding before President Donald Trump and Chinese President Xi Jinping meet at the ASEAN Summit in Malaysia between Oct. 26 and 28. Think of it as leverage before both sides sit down at the negotiating table. 

The first signs of Nexperia-related chip disruptions impacting global auto supply chains emerged from Germany on Wednesday following a report from Bild. 

The local paper said Volkswagen suspended its Golf production lines at its Wolfsburg factory yesterday. 

Production line stoppages will likely impact tens of thousands of employees in Europe’s largest economy. Other automakers like BMW, Mercedes, and Daimler are monitoring the situation, though their production continues, according to Bild. 

The latest developments in the Nexperia turmoil that’s now rippling through the global auto sector:

With the week winding down, the world’s attention turns to Trump-Xi (and also Trump-Modi) meetings to see whether the two global superpowers can ease trade tensions and move toward a potential deal. Naturally, traders will be watching every word closely.