US Automakers Face New Chip Crisis as Geopolitical Spat Halts Exports
Stellantis, Ford, and GM are bracing for production disruptions after a dispute over chipmaker Nexperia choked off a key supply of semiconductors from China.
A new semiconductor crisis is threatening to halt vehicle production in North America, as a geopolitical dispute between the Netherlands and China has cut off a critical supply of chips, forcing major automakers to activate emergency plans.
The disruption centers on Nexperia, a Chinese-owned chipmaker headquartered in the Netherlands. According to recent reports, China has blocked exports from Nexperia's facilities after the Dutch government seized control of the company, immediately reviving fears of the widespread production shutdowns that plagued the auto industry for nearly three years.
Shares of the major US automakers showed a mixed and relatively muted initial reaction. General Motors (NYSE: GM) stock rose modestly by 0.6% to $69.09 in trading, while Ford (NYSE: F) saw a similar 0.5% gain, closing at $13.13. Stellantis (NYSE: STLA), which has significant exposure to the disruption, remained flat. The market's calm response belies the urgent preparations happening behind the scenes in Detroit.
Stellantis, the parent company of Jeep, Ram, and Chrysler, has reportedly activated a "war room" to manage the escalating shortage and prevent assembly line stoppages. According to Morningstar, CEO Antonio Filosa is now monitoring the situation on a daily basis as the company scrambles to assess its inventory of the now-blocked components.
The conflict represents a significant setback for an industry that had just begun to recover from the previous, multi-year semiconductor shortage. That crisis cost automakers hundreds of billions in lost revenue and led to barren dealership lots and soaring vehicle prices. The Nexperia chips, while not advanced processors, are essential for core vehicle functions, and their sudden absence creates a critical vulnerability in the supply chain.
Ford CEO Jim Farley described the Nexperia situation as "political," signaling the complex geopolitical risks now embedded in the automotive supply chain. The company is actively preparing for potential disruptions and is reported to be increasing purchases from alternative suppliers. Similarly, General Motors CEO Mary Barra acknowledged that the constraints could directly impact production, stating that teams are working to find other sources for the necessary chips.
The ripple effects are already being felt upstream. ZF Friedrichshafen, a major German auto supplier for both Stellantis and Ford, has already been forced to reduce its production due to the lack of Nexperia components. Industry groups, including the European Automobile Manufacturers’ Association, have warned that assembly-line shortages could be just days away as existing stockpiles are depleted.
For consumers, a renewed and prolonged production crisis could mean a return to limited vehicle availability and potentially higher prices, just as inventory levels were beginning to normalize. For automakers, it is a race against time to re-route supply lines and find substitutes for the Nexperia chips before the disruption forces them to idle plants and sacrifice billions in revenue once more.