A plant beside a weed-ridden lot in southern China has emerged as a global bottleneck for auto chips, rattling an industry that promised it had learned its lesson on supply-chain disruptions just a few years ago.
Automakers vowed to strengthen supply lines after COVID-19 snarled semiconductor output in 2020 and a Japanese factory fire aggravated the shortage a year later. But the crisis engulfing Dutch chipmaker Nexperia's plant exposed a blind spot: The industry never envisioned low-tech chips would become a lever for China against the West.
"No one prepared for geopolitical disruption, and they're still not prepared," said Ambrose Conroy, CEO of U.S. firm Seraph Consulting, which advises automakers.
The Dutch government took control of Netherlands-based Nexperia in late September, citing concerns its technology could be passed on to the Chinese owner Wingtech. Beijing retaliated by halting exports of finished Nexperia chips packaged at the plant in the Pearl River Delta.
The Netherlands last week reversed course from its decision to take control of Nexperia, signalling a potential breakthrough.
From its Dongguan factory, Nexperia ships semiconductors used in everything
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