Nexperia’s Dutch takeover puts local carmakers on alert

A Chinese-owned company headquartered in the Netherlands is at the epicentre of a new semiconductor chokepoint roiling the global auto industry.

- Ayaan Kartik [e-mail]

The Dutch takeover provoked Chinese retaliation.

(REUTER)

The situation, coming soon after the rare earth magnets crisis, has forced Indian carmakers to issue clarifications to investors during quarterly earnings calls.

The Dutch government's move to take control of chip-maker Nexperia has provoked Chinese retaliation, constricting supplies of critical chips used in vehicles across the world, including those made by Indian carmakers. Notably, such chips are not yet locally produced in India.

The country’s two largest carmakers—Maruti Suzuki India Ltd and Hyundai Motor India Ltd—said in the past few days that their supply chain teams are working to keep the situation in check.

"It is an industry-wide issue," K.S. Hariharan, head of investor relations at Hyundai Motor India, said during the firm's earnings call on 30 October, adding that the company is constantly monitoring the inventory situation, while assuring that current inventory is adequate. “We are also closely working with our vendor partners to mitigate this impact so that we can have uninterrupted production of the plant operations.”

“Our supply chain teams are working on the situation,” said Partho Banerjee, senior executive officer, marketing and sales at Maruti Suzuki, without giving further details.