Steel industry faces knock-on effects of potential auto chip shortage 

Alliance for Automotive Innovation CEO John Bozzella underscored the severity of the situation. “If the shipment of automotive chips doesn’t resume — quickly — it’s going to disrupt auto production in the US and many other countries and have a spillover effect in other industries,” he said in a statement.

The Dutch government seized the Netherlands-based chip manufacturer on Sept. 30, citing, “serious governance shortcomings.” Officials accuse Nexperia, owned by the Chinese firm Wingtech Technology, of running processes that threaten national and economic security. The US, meanwhile, has threatened to add the chipmaker to its “no trade list.” 

China retaliated against the Netherlands by restricting Nexperia China and its subcontractors from exporting finished parts and components for the chips from China to other chip makers.

Nexperia manufactures chips used in car electronics, steering controls, and power management systems. A shortage of such parts can idle entire vehicle assembly lines.

While automakers are working to find replacements, they are up against regulatory constraints and tight timelines. Case in point: Suppliers must maintain certain certifications to sell their chip products. And those certifications can take weeks or months to procure.