The Alliance for Automotive Innovation (AAI) — representing major manufacturers including General Motors, Ford, Toyota, Volkswagen, and Hyundai — said Thursday that ongoing restrictions on Nexperia’s chip shipments could quickly impact U.S. auto production and ripple through other industries.
“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 John Bozzella, CEO of the alliance. “It’s that significant.”
Automakers and suppliers were notified last week by Nexperia that it could no longer guarantee delivery of its semiconductor components, according to the European Automobile Manufacturers’ Association (ACEA), which warned that the disruption could significantly affect manufacturing in Europe and beyond.
The Dutch government announced on September 30 that it had taken control of Nexperia, citing national security concerns and the potential transfer of sensitive technology to its Chinese parent company, Wingtech Technology Co.
Court filings revealed that the takeover followed months of pressure from U.S. authorities, who had warned that Nexperia risked being affected by expanded U.S. export control rules targeting companies that are at least 50 percent owned by entities on the U.S. “entity list.” Wingtech was added to that list in December 2024.
In response, China’s Commerce Ministry issued an export control order on October 4, prohibiting Nexperia China and its subcontractors from exporting certain finished components and sub-assemblies produced in China — a move that further tightened the supply squeeze.
Nexperia’s chips are critical to the production of vehicle components and electronic systems across the U.S. auto industry, and any extended disruption could halt assembly lines within weeks, according to industry sources who spoke to Reuters anonymously.
While European automakers such as Volkswagen and BMW said on Thursday that their operations had not yet been affected, both companies confirmed they were assessing potential supply risks and contingency plans.
The escalating standoff underscores the global auto sector’s heavy dependence on semiconductor supply chains — and how geopolitical tensions between major economies continue to threaten industrial stability across the U.S. and Europe.