US auto plants face chip production shutdowns in 2-4 weeks, says MEMA

US auto plants are facing potential shutdowns in vehicle production within two to four weeks due to a conflict with China over chipmaker Nexperia, according to the Motor & Equipment Manufacturers Association (MEMA), the largest vehicle supplier association in the US.

This month, Beijing blocked Nexperia, a key supplier of chips utilized in the automotive and consumer electronics sectors, from exporting from its facilities in China. This action was taken in response to the Dutch government seizing control of the Chinese-owned chipmaker, reflecting deteriorating trade relations between China and Western countries.

Steve Horaney, a senior vice president at MEMA, stated, “A handful of these chips can literally stop production of a full assembly plant. There are substitutes, but probably not for everybody.”

Meanwhile, Europe’s automotive industry is reportedly working around the clock to prevent production outages stemming from this conflict. Nexperia has informed its Japanese automotive customers that it may no longer be able to guarantee deliveries. China has been imposing stricter constraints on essential manufacturing components, and the Trump administration has responded similarly, ahead of a highly anticipated summit next week between the leaders of the two nations.

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