Get ready for up for another semiconductor chip shortage. 
A Major Chip Shortage Is Brewing
Please note There’s Another Chip Shortage Coming To Screw Up Vehicle Production
A group representing major automakers warned late on Thursday that a chip disruption stemming from a dispute between China and the Dutch government could quickly impact U.S. auto production.
Carmakers and their suppliers received notice from chipmaker Nexperia last week that it could no longer guarantee delivery of its chips, said ACEA, the European Union’s auto association, which also said manufacturing could be significantly disrupted.
In the United States, the Alliance for Automotive Innovation, which represents General Motors (GM), Toyota, Ford (F), Volkswagen (VOWG), Hyundai, and nearly all other major automakers, urged a quick resolution.
“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 the group’s CEO John Bozzella. “It’s that significant.”
Some automakers told Reuters that U.S. auto plants could be affected as soon as next month. They declined to be named due to the sensitivity of the issue.
The chips made by Nexperia are crucial to production of U.S. parts and vehicles.
Why Did This Happen?
The Dutch government announced that it had as of September 30 taken control of Chinese-owned computer chipmaker Nexperia, citing worries about the possible transfer of technology to Nexperia’s Chinese parent company, Wingtech.
Court documents showed the Dutch government’s move came after months of rising U.S. pressure on the company. Nexperia was at risk of being impacted by a new U.S. rule that extends export control restrictions to companies at least 50% owned by one or more entities on the U.S. entity list.
In retaliation, Beijing imposed export controls on certain products made by Nexperia’s China operations, choking off supply to international customers.
Nexperia Chip Shortage Contagion Hits Japanese Automakers
TruthAboutCars reports Nexperia Chip Shortage Contagion Hits Japanese Automakers
First Europe, now Japan. Automakers are getting ready for potential chip shortages after Dutch semiconductor manufacturer Nexperia warned that it may no longer be able to guarantee supply to its customers.
According to a report from Bloomberg, the Japanese Automobile Manufacturers Association is warning that the potential chip shortage will affect parts used in critical vehicle systems such as electronic control units. JAMA also added that any interruption could wreak havoc on its member companies, which include Toyota, Nissan, Subaru, Mazda, Mitsubishi, and Honda, among others.
“The chips manufactured by the affected manufacturers are important parts used in electronic control units, etc., and we recognize that this incident will have a serious impact on the global production of our member companies,” JAMA said in a statement. “We hope that the countries involved will come to a prompt and practical solution.”
The chips in question are not the high-end processors used in infotainment or autonomous driving systems, but rather small, widely used power and logic semiconductors that regulate electrical functions throughout modern vehicles. A shortage of these basic chips in 2021 paralyzed nearly every major automaker worldwide.
Lessons Not Learned
Politico reports Netherlands-China chip war terrifies European car industry
The geopolitical war around Dutch-based, yet Chinese-owned, chip supplier Nexperia is terrifying Europe’s carmakers that they’ll be hammered by a chip shortage that could wreak havoc with supply chains and shutter production lines.
The car industry’s supply of crucial chips from Nexperia is dwindling just weeks after the Dutch government seized control of Nexperia and both the U.S. and China imposed export controls on the company.
“We will see production stops and slowdowns in short order globally because a lot of suppliers don’t have the depth of stock of the chips,” said a senior automotive official who spoke on condition of anonymity because of the issue’s sensitivity. “The auto sector is at the heart of the storm.”
The shortage threatens a replay of 2022, when pandemic-era microchip shortages similarly brought car plants to a halt. Yet automakers have done little to shore up their supply chains against geopolitical shifts, and an EU plan to reshore some chip manufacturing is falling far short of its targets.
Following the 2022 shortage, the EU passed the Chips Act to alleviate the sector’s dangerous reliance on other regions for advanced or “mature” chips.
Fast forward three years, and seemingly not much has changed.
The Dutch government feared that Nexperia’s CEO, who founded Wingtech, was transferring the chipmaker’s technology and production assets out of the country.
Its decision came a day after the U.S. extended export controls on Wingtech to its subsidiary Nexperia.
While Nexperia’s chips are not the most advanced ones, they are critical to automakers: A traditional car contains up to 500 of the company’s chips — an electric vehicle as many as 1,000.
Volkswagen has warned its workers that potential production stoppages are imminent, German outlet Bild reported.
Second Chips Act
The Nexperia case and possible shortages have put the EU’s dangerous microchip reliance back on the political map.
The European Commission announced this week that it plans to introduce a second Chips Act in the first quarter of next year, following a scheduled review due by September 2026.
Currently, the bloc is nowhere close to reaching the goal of the first Chips Act, which was to boost the bloc’s market share in the global microchips value chain to 20 per cent by 2030 — about double its current share.
Both lawmakers and EU countries want a second Chips Act.
Neither the US nor EU learned anything from Chips Disaster I. That’s OK because nobody ever learns anything ever.
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February 18, 2024: How China Gets Around US Sanctions on Semiconductors
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September 27, 2025: Why Trump ‘Secondary Tariff’ Scheme on India and China Is in Hiding
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September 15, 2025: Trump’s Big Miscalculation on Sanctions in a Dollar-Based Transaction World
Sanctions and tariffs have not only united China and Russia, but also the world against dollar dominance.
Questions of the Day
So, when does Trump tell the Netherlands that he really didn’t mean to sanction Nexperia or its parent Wingtech? More importantly, would it matter?
It seems China just found another bit of leverage on Trump when he meets with Xi.
So why should China be in any rush to deliver these chips?
As a Dutchy I am very much ashamed for the actions of my government. What’s wrong with Netherlands first, yeez.
> what’s wrong with NL
fully in the hands of the puppet masters, its so obvious with Agenda 2030 junk science in full implementation beginning with the destruction of Dutch farmers and the totalitarian rest to follow
The article says “computer chips” which means they have no idea what they are talking about. Nixperia is the former Philips Electronics discrete components which means what we call “popcorn components” – diodes, transistors, power supplies, simple logics, etc. Almost nothing that can’t be easily replaced in few months. I can’t even imagine what is so special about their IP so it has to be protected against transfer to China. China already makes tons of stuff like that.
If it so damn easy, why a Toyota and Volkswagen planning on big outages if it continues?
As for “in a few months” are you really serious?
What is the cost of Ford, GM, or Toyota shutting down for “only” a few months?
Just watch, don’t be so dramatic 🙂 Nexperia was never anything special!
If it were really so,why the Dutch did it?
To please the Americans 🙂
A common theme is emerging in the world, everyone needs China & nobody needs the US. Once this integrates into the minds of the masses goodnight the US with their un-payable $38 trillion anchor.
but but but Trump promised to make us great and dominate the world in trade by fixing all the trade rape we have been victimized by!
less screen
more knobs
That’s what they said at the drive ins a half century ago.
Build a 1985 Mazda or Toyota PU selling for $20K and you’d be a billionaire in no time. You’d have to add air bags and lessons for buyers to learn to drive manual but it could be done.
Essentially what fatbikes are. With a $8000 fatbike that wheigh less than 100lbs, drive during 150Miles at 100Mph.
The lower mass to move also means you ll spend 10 times less on fuel or electricity for commuting. Even at $2.50 per gallon (My personal consumption is 7Kw h of electricity per 100 miles).
I had a hard time convincing my new employer how my 47 Miles daily commute isn t going to eat away my minimal wage pay😁.
The only annoyance is not being authorized on the motorway despite having the license to drive 1000lbs vehicules and the fatbike having turn signals and hyraulic brakes. This makes the top speed of my hardware useless in practice☹
– A group representing major automakers warned late on Thursday that a chip disruption stemming from a dispute between China and the Dutch government could quickly impact U.S. auto production.
> Knowing it’s more than the following, it might have helped a whole lot. Coming from a career in SCM, this is and should be a very fireable offense by someone getting paid good money to make sure it doesn’t happen!!! Who allowed a dispute, between 2 Other Countries, to hurt Your Own Country?
>> Either extremely poor inventory, and crisis Inventory specifically, which should never happen imo without an outright disaster being the cause.
– Carmakers and their suppliers received notice from chipmaker Nexperia last week that it could no longer guarantee delivery of its chips.
> Well a few questions emerge immediately, but answers should be at the forefront, to resolve the issue now, and in the future with better Management and Systems in place imo.
Q1 Where is the back-up “Critical Inventory”?
Q2 If the back-up “Critical Inventory” is gone, they why?
Q3 Are we broke? Do we access to Money? Did the People in charge get paid? Why didn’t we have Material Again?
A1-? You’re Fired, Your Fired, etc. Until the people responsible are removed and replaced.
Top 10 Reasons Trump’s Auto Chip Shortage is Actually Great for America
10. Revives classic American values: if your car won’t start, you just have to pull your bootstraps up harder.
9.The radical left has been waging a costly War on Cars for years. Now we’ll win it — without spending a dime.
8.Eliminates those annoying “Check Engine” lights… permanently.
7.It’s bringing back jobs to America — suddenly every town needs a blacksmith and a scribe.
6.The resale value of your grandma’s Schwinn just paid off your student loan.
5.Distracted driving no longer a problem when your car’s biggest feature is an AM/FM radio.
4.Builds character. Remember character? We’re bringing it back, bigly.
3.Opens up a yuge market for the ultimate anti-theft device: a car that’s impossible to hack.
2.Teaches China a valuable lesson: you can’t spell “SANCTIONS” without “S-T-O-N-K-S”.
1.This whole chip mess is a “Holland and Chayna” problem. They’ve been going at each other so long they don’t know what the fuck they’re doing. One’s in wooden shoes, the other’s in flip-flops. I told them, “Let’s make a deal.” Maybe Holland has to cede some territory. We’ll see what happens.
what a character.
Lets go back to stone age and we will not need anything from China or anybody else at all, clear win.
You eat what you hunt or grow, all local.
There was discussion about China taking over USA. That is exactly what I meant, Trump’s USA is going back in time to 1950 or before and China is going to 2050 and beyond. Who will lead the world?
Top reason Trump’s Auto Chip Shortage is Actually Great for America Car Manufacturers
They can’t sell they cars and trucks they built last year this gives them an excuse to shut down production that the unions will have a hard time fighting.
On the up side maybe a small truck maker will produce a light truck with out chips like in 1969.
Essentially what fatbikes are. With a $8000 fatbike that wheigh less than 100lbs, drive during 150Miles at 100Mph.
The lower mass to move also means you ll spend 10 times less on fuel or electricity for commuting. Even at $2.50 per gallon (My personal consumption is 7Kw h of electricity per 100 miles).
I had a hard time convincing my new employer how my 47 Miles daily commute isn t going to eat away my minimal wage pay😁.
The only annoyance is not being authorized on the motorway despite having the license to drive 1000lbs vehicules and the fatbike having turn signals and hyraulic brakes and being modifiable for wearing a license plate. This makes the top speed of my hardware useless in practice☹
It’s not the Dutch government, it’s the American occupation authority.
Americans routinely make decisions for French, Dutch, and German corporations, even pursuing extra-jurisdictional prosecutions of their CEOs. European nations’ foreign policy always aligns with their suzerein.
People are always whining about the uneven burden sharing between the US and Europe. Why do you think the Americans have never pulled out of any of the countries they occupied after WW2? Why do you think they entered the war in June 1944? Obviously to seize Europe, pre-empting the Soviet Union.
So true! Welcome to groundhog day.
It’s not just cars.
It’s also washing machines, all kinds of other consumer products, the chips on your SIM card, the contactless payment systems, chips on you bank card, RFID tags, the chips in your passport, etc etc. All kinds of simple general utility high volume chips. It’s more about production technology than the chips themselves.
The company was acquired by Wingtech, but is, like its NXP parent as well as ASML Lithography (also under US constraints), a spin-off of Philips Electronics.
It is the first ever use of a 1952 cold war law.
The irony is that it was supposed to be China that suffers from chip embargo. It is not really an irony, since the vast majority of gubermint: US congress, EUcracy, NATO is conscripted from layers, and similar useless eaters who never held a industry job in their lifetime.
Hey, which blogs do you recommend?
You obviously know things. You post on Mish and you know things. 😉
I’m from the pre-blog era.
In this case I have some affinity to the subject, living in The Netherlands.
For the rest, my only allergy is to BS; whenever my nose twitches I feel compelled to dig (dig dig) into anything that does not compute or make sense. It is also illuminating to read what newspapers in China, India, Russia, or Africa are saying. And to look at the funding and sources behind any reporting. In general it is not really possible to keep abreast of too many topics, there’s so much that is silenced, cherry-picked, public but left out of the narratives, slanted, and of course, down right untrue in the rivers of “information” that inundate us.
Of course the same was true in the pre-media era when there was no more than a trickle. I always liked the joke about Stuart, who is reading a really thick book.
Gary: So what are you all reading?
Stu: It’s very interesting, about world history.
Gary: Any lessons to be gleaned?
Stu: Yes. It’s really surprising, but in all those millennia with thousands of wars, the good guys always win out.
Why blame Trump for what China does?
Also why not blame the car industry for not learning from the 2021 shortage? Just in time bean counters means lean inventories and failure to ensure that there is zero reliance on China or other hostile nations for components is stupid. China has excess car production and extreme price discounting. The Chinese just need any excuse to sabotage their foreign competition so that they win more market share and they will dominate the international markets. At my Australian residence my wife purchased a Chinese made MG last year and my son a Chinese made Tank this year. And at my Egyptian residence my next car will also likely be a Chinese made BYD. Multiply me by a billion other car owners and your car industry will die like it has in Australia.
What did China do wrong?
I’m not blaming China for this. I’m blaming corporate culture for letting the bean counters push their industry into a forceable predicament. No stocks of critical components, no alternate suppliers, no planning for tariff related tit for tat actions and sanctions.
Imagine if we ran our homes like this. Just keep only enough food, soap etc for the next day or two and only enough cash for today. Then when things go down we are effed.
I doubt that taco can spell the words, “chips.” His mind would likely switch to “cow chips.”
Wow! That’s really deep.
CA rob people at the pump. In TX gas prices are about $2.50. In New Orleans: $2.25. In SF: $5/gallon. In CA Tesla sales are up. CA total registrations: 340K/Ice + 110K/EV = 450K. Thus EV is 25% of the market. EV engines are simpler. If Ilan, GM, F, WV…build cars between $20K and $30K, protected by tariffs, their share of the market will rise. If China goes low ==> go lower. UAW employment will be higher.
Yeah everyone fondly remembers their old “play” car
I remember trying to get a car started in -20F temperatures and shooting either into the carburator
Fuel injection was widely available in the mid/ late ‘80s. That solved the frigid start problem for the most part.
Cars have to many useless chips, I love driving my 64 VET more than my 2024 witch has too many gadgets I never use and don’t make driving fun. Chips remove the fun out driving.
I like the sweet spot of the 90’s when airbags and ABS brakes became standard but before bloated MP3 and navigation systems.
I LOVE the 1970’s Stingray. (Yeah, okay. Guess I was just the “right” age for it to leave an indelible impression.) But I don’t want to buy and drive something without air bags…or good crumple zones. Some of those features probably depend on chips.
Time to take the ’71 Dodge Demon off the blocks and out of the barn. Somehow the Cubans are able to keep their ’55 Chevys running.
“Neither the US nor EU learned anything from Chips Disaster I. That’s OK because nobody ever learns anything ever.”
Human nature never changes. We have had multiple back to back financial bubbles, before the previous one even became a distant memory.
It’s hard to believe that so many industries have made themselves so utterly dependent on dubious technology they can’t even duplicate.
So they said with the cotton gin
Specialized manufacturing came in a long time ago
Specialization is generally considered to be a positive attribute of capitalism. As is contract law and intellectual property.
Ford peaked in 1999 at $37. When Ford CEO decided to make 787 F-150 from aluminum Ford dropped to $1.01. In Jan 2022 it popped up to $26. In 2025 Ford dropped to 1987 hi: return to F150 from steel. Cut the chips bs. Keep your products simple.
Oh and build an F150 for less than $25K
Bang, bang, boomerang. ABBA song from 1970s. That’s how it ends when Lunatic’s DoT issues a list of 14000 names to be sanctioned. They knew that this would be a problem but they put Nexperia there. Nexperia fabricates wafers in Europe and packages 1/2 of them in China and the rest in Malaysia and Philipinnes. Who would have thought that packaged chips flow would stop when there is no packaging available because Wingtech controls it ? Hahaha, a gang of idiots. The result could be that Chinese wafer fabs will supply the same chips to Nexperia’s parent for packaging and then these chips will be invoiced in yuans. Wingtech can fabricate wafers with legacy chips but the question is how many. The worst case is that Nexperia shuts down completely.
Down vote for bringing up ABBA. You lost me there.
If the lack of affordable cars forces people to pedal to work, courtesy of “substitution” magic will the regime report a drop in transportation costs? Will the Fed restart QE to fight the sudden bout of “deflation”?
That better be a nice TACO I smell coming from the trump smokehouse.
The VIX is back down to 16 while Russia is testing ICBM’s and, we are sending long range missiles to the Ukraine? What could go wrong??? Add that to another chip shortage for our auto industry and you have a market that is toooooooo complacent.
Gold above $4,000 is not exactly a strong endorsement of trust and confidence IMO.
Ford’s Global Foundries agreement seems to have yielded nothing as Ford is sounding the alarm regarding Nexpirias chips as well.
Oddly Nexpiria is owned by a Chinese company (Wingfoot) so it seems strange that a Dutch company can make any decisions that would impact technology that China already has up and running in its factories. That puts this ball in China’s court IMO again.
https://www.moonofalabama.org/2025/10/china-reacts-after-u-s-pushed-netherlands-to-seize-chinese-owned-company.html
One fellow reader dislikes links. Who knew??
Nexperia had it roots in the Netherlands since 1920 but then it was sold to a Chinese company. The Dutch were worried that the IP was being transferred to China. Of course it was and probably happened within a year after being bought. Why wouldn’t they? China probably has no long term plans this former Dutch company in the Netherlands?
On October 25, 2018, Nexperia was acquired by Wingtech a partially state-owned Chinese ODM for smartphone companies for $3.6 billion. Wingtech is partially owned by the State-owned Assets Supervision and Administration Commission of the State Counc
Although I dislike the existence of billionaires at all, in hybrid economies, changes in their number and total wealth probably mean “something”. During the past 2 decades, Europe’s numbers dropped. USA and China numbers rose.
To top it off, Europe used to rely on cheap hydrocarbons from USSR and then Russia. Now they’re even more SOL.
Poor Europe.
Maybe one day China completes fusion energy and helps them out.
Europe’s loss, China’s gain.
https://kdwalmsley.substack.com/p/china-russia-building-natgas-pipelines
One day Josep Borrell will make Ozymandias’s quote his own: Look upon my garden ye, and despair.
“Court documents showed the Dutch government’s move came after months of rising U.S. pressure on the company.”
Awesome! Way to go Schoof & Trump! Put more pressure on other allies to nationalize / take control of Chinese assets.
Hurry up & nationalize Smithfield foods & all the land China has bought here in the USA. Then sell them for pennies on the dollar & have Trump present Xi with a $5 gold coin that he needs a microscope to see at state dinner in Trump’s new $300M ballroom.
That will get their attention. Woohoo! MAGA!
What happens to global auto market share when BYD is churning out superior and less expensive EV’s and no one else is even able to assemble a car?
Europe and USA will raise their tariffs against China EV’s, because — like the bullshit they slung 1-2 years ago — “they’re piling up in Belgian ports because no one wants them”. (If you looked at the photos Mish posted, it was hard to see actual brands. The story never made sense. I bet it was fake news.)
Hard to guess what else happens.
GM just shut down their hydrogen fuel cell program. 350 people gone. Much more to come. MAGA!
Apply at Ballard Power Systems, Inc.
GM has been working on fuel cell technology for at least 30 years. The company is a lot like NASA. They have many irons in the fire but none of them ever come out as a working tool.
Had they been building quality, affordable cars for the last 30 years they would be way ahead of the failing company they are now.
The cascading knock off effects of these events is often overlooked too. If there are less chips shipping over then it means shipping goes down. If shipping is down then trucking is down as well. If trucking is down then so too is energy use….etc…etc..
Freight Waves added a layoff and bankruptcies section that I’m keeping an eye on and it’s getting uglier and uglier the longer this administration lasts…
https://www.freightwaves.com/news/category/news/business/layoffs-and-bankruptcies
Thanks for the info.
Despite tariffs, US merchandise imports increased and exports held steady in the first half of 2025
https://www.piie.com/blogs/realtime-economics/2025/despite-tariffs-us-merchandise-imports-increased-and-exports-held
Those miserable greenies have been trying to destroy the auto industry for over 100 years, because they hate gasoline and our freedom. But they were too stupid to pull it off! Now our President, the greatest President since Julius Ceasar, has been able to do it in just 10 months! This is why we vote Republican, and you should too!
The greatest President since Julius Ceasar? LMMFAO!!!!!!!!!!!!
And they think I am MAGA, OMG thanks for the belly laugh, I needed that
Odds are your belly laugh contains a molecule of the same air that Julius Ceasar once breathed.
Also possibly California’s next Governor!
These next few years are gonna really suck for people who don’t have enough money to have followed Trump’s transparent market road map to easy profits. They are hurting, but this is just a warm up for their main event.
One good thing I read is more and more middle class families low income families are investing in the stock market. LOL
I still am amazed at the wealth appreciation some of my middle class friends have seen over the past 5 years. Equal to 3 or 4 years of their income.
Bring back buttons and knobs. Most accidents are caused by drivers taking their eyes off the road to look at the damn screens. With knobs and buttons, you learned by feel where everything was located. A stinking car doesn’t need computer chips that are 100,000 times more powerful than what was used to land man on the moon.
landing a man on the moon a hoax as of course everyone knows today.
well documented in tons of places, e.g.
https://fadilama.substack.com/p/mass-psychology-in-geopolitics-2
(hat tip to dr. meryll nass for this one)
It must’ve been so incredibly boring for them to see zero stars outside their windows while traveling outside the atmosphere, such that they didn’t think it worth snapping any photos. After all, we know the best place to gaze upon the Milky Way is down near sea level where the atmosphere is thickest.
Can’t fake the Moon landing photography. Discovery Channel’s Myth Busters did an episode on dismantling the claims the Moon landing was a hoax.
Someone said – it would have cost more to fake that landing in 1969, than the landing itself.
Might be true – I have a friend that insists that the moon itself does not exist. So, we can not land on something that does not exist – right?
If the Moon doesn’t exist, how did the cow jump over it?
There’s a firmament. It’s in the bible. 😉
https://physicsworld.com/wp-content/uploads/2020/07/Flat_Earth_illustration.jpg
Totally agree
Replace drivers with autonomous cars. No more human caused accidents or problems.
So true, we’d just have computer controlled crashes.
Maybe Milei can toss in some cow chips with those boatloads of Argentine pesos he’s sending us.
Bad for the auto industry.
Not so bad that the newest tech, compu crap cars may be fewer