According to The Wall Street Journal, the chips in question are not the cutting-edge semiconductors that power autonomous systems or advanced driver-assistance features. Instead, they are basic microchips, the kind used in dozens of everyday vehicle functions—engine control units, airbags, power steering, lighting systems, and infotainment. These components are inexpensive and easy to overlook, but they are essential. Without them, entire production lines can grind to a halt.
That’s exactly what some automakers are beginning to face. Honda Motor Co., Ltd., which operates major production facilities in North America, has already reduced output due to limited chip availability. Industry analysts warn that other manufacturers could soon follow, as inventories for such components tend to be smaller and supply chains are often linear—dependent on just a few key suppliers.
This situation echoes the semiconductor shortage of 2020–2022, when the pandemic disrupted production and exposed how dependent the automotive sector had become on a handful of chipmakers. But this time, the cause is different—and potentially more complicated.
The export halt reportedly stems from national security measures imposed by Chinese regulators, part of an ongoing tit-for-tat between Western nations and Beijing over technological control. The Netherlands, under U.S. pressure, has already restricted exports of advanced chipmaking equipment to China, affecting Dutch semiconductor giant ASML. Now, with Nexperia caught in the crossfire, the impact is moving in the other direction: from China outward.
For Nexperia, which manufactures most of its chips in China, the decision highlights the challenge of balancing European ownership with Chinese operations. Although the company is headquartered in the Netherlands, it was fully acquired by Wingtech in 2019—a move that drew scrutiny from European regulators worried about strategic technologies being tied to China.
Automotive supply chains rely on a steady flow of low-cost, high-volume chips. These are the “commodity semiconductors” that keep vehicles running smoothly, and they don’t have many substitutes. As one analyst told the Journal, “It’s not the fancy chips that will stop you—it’s the fifty-cent one you can’t replace.”
Production slowdowns are already being reported in select plants, and Tier 1 suppliers—companies that provide assembled systems like braking or power control modules—are scrambling to find alternative sources. But relocating chip supply is not simple. Manufacturing capacity for these legacy semiconductors has been heavily consolidated in Asia over the past two decades, and building new facilities in Europe or North America can take years.
Automakers are under growing pressure to “de-risk” their component sourcing by moving production closer to home. The U.S. CHIPS and Science Act and the European Chips Act were both designed to encourage domestic semiconductor manufacturing, but those efforts focus largely on advanced chips, not the basic ones now at risk.
If the export suspension persists, automakers could face unexpected downtime, rising costs, and delivery delays—all of which may ultimately reach consumers through higher vehicle prices or reduced availability.
The Dutch Enterprise Chamber ruled on October 7, 2025, that there were legitimate reasons to question the management practices of Nexperia under former CEO Zhang Xuezheng, leading to his immediate suspension. The court also ordered that all voting rights on Nexperia shares held indirectly by its Chinese parent company, Wingtech Technology Co., be transferred to an independent administrator. In the wake of the ruling, CFO Stefan Tilger was appointed interim CEO, while COO Achim Kempe and CLO Ruben Lichtenberg continue in their roles. Guido Dierick was named non-executive director to help stabilize company leadership.
In parallel, the Dutch Ministry of Economic Affairs issued an emergency order under the Goods Availability Act, citing serious managerial failings that threatened the reliability of semiconductor supply for the European market. The order prevents Nexperia from relocating assets, dismissing executives, or making key strategic decisions without government approval for one year. The intervention aims to safeguard the continuity of semiconductor production within the Netherlands and across Europe, ensuring that Nexperia’s products remain available for industries dependent on its technology. Despite these restrictions, Nexperia has stated that day-to-day operations will continue normally