Chip dispute could leave carmakers in bind

Automakers and their suppliers are piecing together new supply chains after a Chinese-owned company in the Netherlands was caught in the middle of the trade war, revealing European vulnerabilities, writes Melissa Eddy from Munich

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Workers assemble batteries for Mercedes-Benz electric vehicles in Stuttgart. Mercedes, Stellantis and Nissan have formed task forces to keep production running and secure alternative chip supplies.

(NYT)

Automakers around the world and their suppliers have begun scaling back production after a dispute over a Chinese-owned chipmaker in the Netherlands led to a shortage of the semiconductors needed to power the systems in vehicles.

Representatives from China and the European Union met Tuesday in an effort to resolve the standoff, more than a month after the Dutch government seized control of the chipmaker, Nexperia. Beijing has halted deliveries of chips from its factories and criticised officials in the Netherlands for failing to work to find a resolution.

Efforts from Washington to try to resolve the dispute have failed, leaving more companies concerned that they may be forced to halt production if a solution is not found soon.

Europe's car industry has been the most vocal, but Nexperia makes thousands of chips used by other industries to make products like washing machines, vacuum cleaners, night vision devices, radars and tanks.

“T think there are very justified concerns about global manufacturing output being impacted if this can’t be resolved in the next few weeks,’ said Chris Miller, author of the book Chip War, who reports widely on the semiconductor industry.