Automaker Groups Warns Nexperia Chip Halt Could Rapidly Disrupt US, European Vehicle Production

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Oct 18, 2025 - 09:56 Updated: Oct 18, 2025 - 09:47
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Automaker Groups Warns Nexperia Chip Halt Could Rapidly Disrupt US, European Vehicle Production

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Major auto industry associations on both sides of the Atlantic are warning that a fast-escalating semiconductor dispute involving Chinese-owned chipmaker Nexperia could trigger production stoppages within weeks, jeopardizing output in the United States and Europe while reviving fears of a new supply chain crisis.

Nexperia, owned by China’s Wingtech Technology but headquartered in the Netherlands, notified customers on Oct. 10 that it could no longer guarantee delivery of critical automotive chips after China’s Ministry of Commerce issued export controls blocking shipments of certain components from its Chinese manufacturing sites, according to the European Automobile Manufacturers’ Association.
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Two days later, on Oct. 12, the Dutch government took the unprecedented step of seizing control of Nexperia’s management, citing concerns over “serious governance shortcomings” and the potential loss of strategic technological capabilities to foreign interests.

The Association said the situation poses an immediate threat to European vehicle output.

“Without these chips, European automotive suppliers cannot build the parts and components needed to supply vehicle manufacturers, and this therefore threatens production stoppages,” the group said in an Oct. 16 statement.

In the United States, the Alliance for Automotive Innovation—which represents General Motors, Ford, Toyota, Volkswagen, Hyundai, and nearly all major automakers—issued a similar alert. “If the shipment of automotive chips doesn’t resume–quickly–it’s going to disrupt auto production in the U.S. and many other countries and have a spillover effect in other industries,” said the group’s CEO, John Bozzella. “It’s that significant.”

While no factories have yet been idled, automakers told Reuters they are working with only weeks of inventory. Volkswagen and BMW said they are monitoring the situation and identifying alternative sources, but acknowledged the tight timelines.

Industry analysts say even small interruptions in chip supply can cripple production.

“The practical challenge confronting automakers is formidable,” trade journal Automotive Manufacturing Solutions noted. “Unlike consumer electronics manufacturers who can delay non-essential products, automotive production operates on precisely calibrated just-in-time schedules. A shortage of chips totalling perhaps a tenth of a per cent of total semiconductor content can render entire vehicle architectures inoperable.”
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The crisis stems from intertwined government actions. On Oct. 4, China imposed export restrictions on Nexperia’s Chinese operations, barring the shipment of specific finished components and sub-assemblies. On Oct. 12, the Netherlands invoked the Cold War-era Goods Availability Act—for the first time—to assert control over Nexperia’s management and block strategic decisions without government approval for one year. Dutch authorities said they acted to protect “crucial technological knowledge and capabilities” deemed vital to European economic security.
Wingtech, the Chinese company that owns Nexperia, called the move politically motivated, accusing the Netherlands of “discriminatory treatment.” Nexperia said it is petitioning the Chinese regime for exemptions to resume exports and expressed confidence that, ultimately, a “solution will be found” to the crisis.

The dispute unfolds amid heightening global tensions over semiconductor supply chains. The United States placed Wingtech on the entity list in December 2024 and recently expanded export controls to include any subsidiary 50 percent or more owned by a listed firm—capturing Nexperia by extension. China has responded with its own export restrictions, including on rare earth elements critical to chipmaking.

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