As many undoubtedly remember, the global supply chain was disrupted in a major way by the COVID-19 pandemic, a problem that persisted for years. Perhaps the biggest shortage stemming from that disruption pertained to semiconductor chips, which are used in a variety of applications ranging from computers to automobiles, prompting calls for increased domestic production of those parts. Unfortunately, it seems as if we’re now facing another potential chip shortage, according to a Ford backed lobby group.
According to Reuters, that group is the Alliance for Automotive Innovation, which represents Ford, General Motors, Toyota, Volkswagen, and most other major automakers. It comes after chip maker Nexperia sent a note to suppliers and automakers recently informing them that it can no longer guarantee its ability to deliver chips – which is a huge problem given the fact that this company’s chips are critical to U.S.-based automotive production, potentially impacting it as soon as next month.
This problem stems from a decision by the Dutch government to take control of the China-owned chipmaker late last month, amid concerns that it may transfer sensitive technology to its parent company, Wingtech. Nexperia was at risk of being impacted by U.S. rules that place restrictions on companies that are at least 50 percent owned by entities on a restricted list – and in this case, that outfit is 100 percent owned by the China-based Wingtech. In response, the Chinese commerce ministry issued an export control notice that prohibits Nexperia and its subcontractors from exporting specific components.
“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.”
This potential chip shortage comes as Ford is facing a variety of other issues that are also impacting vehicle production. Those include the fact that China is working to expand restrictions on critical rare earth exports and related technologies in an effort to prevent the misuse of such materials in military applications, as well as other sensitive areas. Additionally, a recent fire at one of Ford’s chief aluminum suppliers has already resulted in production of several models being paused or cut back in recent weeks.
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