Global Automakers Struggle As Nexperia Ban Hits Supply

A power struggle over Nexperia, a Chinese-owned Dutch semiconductor manufacturer, is impacting Global automobile production, blocking the semiconductor supply. However, there are signs that the crisis is inching towards a resolution. 

Nexperia highlights how the technology supply chain vulnerabilities are squeezing automobile manufacturers. Majorly pressurising Honda to stop production at a Mexican factory making its popular HR-V crossover for North American markets. It also reveals how Europe is struggling amid the wider geopolitical showdown between Beijing and Washington.  

The turmoil erupted in public view in the middle of October, when the Dutch government announced it had invoked a rarely used World War II-era law to take effective control of Nexperia, which was subsequently taken over weeks later. 

The Dutch Ministry of Economic Affairs said it took action due to national security concerns. Officials said that they intervened due to serious governance shortcomings at Nexperia, asserting control to prevent the loss of critical technological knowledge that could endanger Europe’s economic security.  

Nexperia’s Chinese owner, Wingtech Technology, a partially state-owned company, is at risk of dispute. In the middle of a boardroom battle, a Dutch court granted the ministry’s request to dismiss Nexperia’s Chinese CEO Zhang Xuezhang. US officials told the Dutch government he would have to be replaced to evade trade conditions, according to a court filing.  

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