Not again! Looming semi-conductor chip shortage may halt car production
Dutch firm Nexperia’s inability to produce semiconductors looks like it’ll have a knock-on effect for the car industry
The semiconductor chip shortage that plagued the automotive world just a few years ago is threatening to return. Leading microchip manufacturer Nexperia, which is based in the Netherlands, has raised concerns about the availability of semiconductor products it needs for its chips. This has the potential to halt car production and restrict the availability of new cars for consumers.
Nexperia was partly-owned by the Chinese government and has manufacturing operations in China but due to “serious managerial shortcomings” the Dutch government took control of the company last month. The fallout from the move saw the Dutch courts replace Nexperia’s CEO Zhang Xuezheng with a non-Chinese executive and this caused the Chinese government to respond by banning the export of Nexperia’s products.
This dispute around Nexperia’s ownership has raised concerns about the “availability of semiconductor products critical to the European industry”, according to the firm.
As cars become more software-oriented, chip shortages become increasingly problematic. For example, the original Volkswagen Golf had around 30 semiconductors while the current Golf has around 8,000, the all-electric ID.7 has roughly 10,000 more. Volkswagen says it’s “in close contact with stakeholders in light of the current situation”, and that, “short-term effects on production cannot be ruled out”.
Volkswagen Group and Rivian Technologies recently announced a partnership that will result in a ‘secure supply’ of ‘high-tech semiconductors’ - though this will be for cars produced in the future rather than any current models.
Other automotive firms that source chips from Nexperia either directly or indirectly include; Nissan, Honda, Mercedes, BMW and many other big-selling car brands.
The previous semiconductor shortage which started during the Covid pandemic was exacerbated by geopolitical factors and affected most electronic goods - from Playstations to washing machines. Chip shortages caused several car firms to halt production - factories such as MINI’s Oxford plant, Renault’s Flins factory in France and even General Motors in North America all paused their production lines.
Did you know you can sell your car through Auto Express? We’ll help you get a great price and find a great deal on a new car, too.
Find a car with the experts
