Honda Motor will temporarily suspend production at some factories in Japan and China from the end of December this year to early January next year due to disruptions in the supply of key automotive chips, once again highlighting that the international game surrounding semiconductor manufacturer Nexperia has not yet ended. Bloomberg quoted news from Honda as saying that due to the shortage of some key components, Honda plans to implement limited production suspension adjustments in China and Japan. The problem is believed to be related to the ongoing dispute between the Dutch and Chinese governments over Nexperia, a logic chip supplier.
In terms of specific arrangements, the three vehicle factories of Guangzhou Honda Automobile Co., Ltd., a joint venture between Honda and Guangzhou Automobile Group, will completely suspend production from December 29 to January 2. In Japan, Honda will suspend production at some factories on January 5th and 6th, and then partially resume operations with reduced load before January 9th. Although the company has not yet named the Japanese factories involved, industry media Digitimes (via Tom's Hardware) speculates that factories in Suzuka and Saitama are very likely to be affected.
This fluctuation stems from the political and industrial chain conflicts surrounding Nexperia since October this year. Nexperia is not a company that produces cutting-edge process chips like TSMC, Samsung or Intel, but it supplies a large number of logic chips to car companies for basic electronic functions such as electric window lifts and wipers. It is an indispensable part of the global automotive supply chain. The company has business entities in the Netherlands, Germany and the United Kingdom, but its parent company is Shanghai-based Wingtech Technology, and part of Wingtech’s equity is held by Chinese government-backed capital.
Earlier this year, the U.S. government placed Wingtech on its semiconductor entity list and threatened to consider further sanctions if the company did not change its management. In October, the Dutch government used a Cold War-era law to forcibly take over control of Nexperia out of concerns about the security of its supply chain. In response, Beijing temporarily suspended some of Nexperia's exports to China, which are an important basis for its supply of chips to global automakers.
The above actions quickly triggered a chain reaction in the global automobile industry chain. After the Netherlands took over the company, Honda briefly cut production capacity at its factories in the United States and Mexico. Volkswagen, Stellantis, Ford, General Motors, Volvo, Mercedes-Benz and other multinational car companies also successively stated that the dispute surrounding Nexperia may threaten their own supply security. Many manufacturers were only days away from being forced to suspend production.
Since then, the Dutch government, Beijing and Honda have successively adjusted or withdrawn some measures, and short-term tensions have eased. The Netherlands also returned control of Nexperia to its Chinese parent company. However, Wingtech, the parent company of Nexperia, subsequently accused the subsidiary of secretly adjusting its supply chain layout in an attempt to reduce its dependence on China, further exacerbating the internal rift between the two parties.
Honda's latest shutdown plans at its factories in Japan and China show that the dispute surrounding Nexperia is still evolving, and the global automotive chip supply chain has not yet returned to true stability. Honda's stock price fell about 1% on Thursday after the news was announced, reflecting continued concerns in the capital market about supply chain uncertainty. In the context of electrification and intelligence driving the increasing dependence of automobiles on semiconductors, even traditional logic chips used for basic functions are enough to force automobile manufacturers to press the "pause button" on production once they are involved in geopolitical games.