Will the Automotive Supply Chain Crisis Be Resolved?
The supply chain crisis in the automotive industry, which began with Nexperia, a semiconductor manufacturing company, appears likely to be resolved for the time being following the US-China summit.
The Wall Street Journal (WSJ) reported on October 31 (local time) that, according to an agreement between US President Donald Trump and Chinese President Xi Jinping, Nexperia is expected to resume exports of semiconductors produced at its Chinese factories. The WSJ cited sources familiar with the matter. This agreement is reportedly set to be included in White House documents detailing the specifics of the US-China trade deal.
Nexperia, headquartered in the Netherlands, manufactures general-purpose semiconductors used in parts supplied to major automakers. Nexperia's semiconductors are used in a wide range of automotive components, from speedometers to air conditioning systems.
In 2019, the United States placed Wingtech, a Chinese smartphone assembly company that acquired Nexperia, on its export restriction list. After announcing this measure at the end of last year, the United States reportedly demanded that the Dutch government strip Wingtech of its management rights over Nexperia. In fact, at the end of September, the Netherlands revoked Wingtech's management rights, citing national security concerns.
In response to these actions, the Chinese government blocked exports of semiconductors produced at local factories in Shanghai and Beijing. As a result, Japanese automaker Honda halved production at some of its North American plants to cope with the semiconductor shortage.
With the latest agreement between President Trump and President Xi, there are expectations that the supply chain crisis in the automotive industry will be alleviated for now. The White House is expected to soon release a statement outlining the details of the agreement regarding Nexperia.
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