China vs Netherlands: Auto industry caught in crossfire
The Dutch government just seized Nexperia—a major supplier of basic car chips—over security worries tied to its Chinese owner, Wingtech Technology.
China fired back with export restrictions affecting products processed in China, which accounts for about 80% of Nexperia's output.
Now, automakers worldwide are scrambling as chip supplies run low, and some factories might have to pause production by November 2024.
Finding replacement chips isn't quick or easy
Nexperia makes about 40% of the simple chips cars need for things like power and safety systems.
With China's restrictions in play, industry groups like ACEA and VDA warn that finding replacement chips isn't quick or easy—it takes time to test and approve new parts.
This whole situation is a real-life example of how global politics can mess with supply chains and put jobs (and new cars) at risk.