The auto industry is panicking about another potential chip shortage

The auto industry is digesting a new and damaging potentially supply-chain disruption from an unlikely source: a small Dutch semiconductor manufacturer with an outsize influence on how cars and trucks are made.

- Ryan Felton, Raffaele Huang & Stephen Wilmot

Nexperia notified customers last week that it was stopping shipments of parts, people familiar with the matter say. The company's chips are used in everything from lights to electronics. The move came after the Dutch government wrested control of the company from its Chinese owner.

Nexperia declared the continuing situation a "force majeure" event, the people say, citing a provision that generally can excuse companies from contractual obligations when facing an extraordinary situation.

While Nexperia is a small player in the automotive-chip market overall, it is the market leader for a basic category of chips mainly consisting of transistors and diodes, said Ian Riches, a vice president at TechInsights, a chip data and intelligence provider. In that category, Nexperia has about a 40% market share, he added.

"They go into everything and anything," Riches said. "If you're building a complicated product, it only takes a shortage of one basic component to stop the whole thing."

Nexperia, whose parts end up in cars from BMW, Toyota and Mercedes-Benz, produces high volumes of semiconductors and basic transistors that are used in vehicle systems, including electronic control units. Car companies and parts makers are now racing to understand their exposure and find alternative sources of chips, saying that if Nexperia can't ship then vehicle production could be affected in the next few weeks.

General Motors in recent days sent a survey to its suppliers asking whether they buy chips from Nexperia and how many, people familiar with the situation said.