Chip Shortage Woes Impact Honda’s Global Production Plans

Honda announced a temporary halt in production at several Japanese sites from January 5-6, after which the plants will operate on a reduced schedule until January 9. The company hasn’t detailed the exact facilities affected, but sources estimate that it might involve the Suzuka and Saitama plants, primarily focused on cars for the Japanese market. Additionally, Honda plans to shut down three plants in China from December 29 to January 2.

According to Digitimes, the restrictions are due to a shortage of chips sourced from Nexperia. These semiconductors, though not as advanced as those produced by TSMC or Samsung, are crucial for vehicles, being used in systems such as electric power steering and electric windows. The issue intensified in mid-October when Dutch authorities removed Nexperia from its Chinese owner, Wingtech, amid suspicions of illegal technology transfers. In response, China limited the export of certain Nexperia products, negatively impacting global auto supply chains.

The industry had warned of potential disruptions: by late October, companies like Volkswagen and BMW reported slowing production rates, while mid-November saw renewed reports of chip shortages affecting the automotive sector.

In recent weeks, there have been signs of improvement: China has permitted Nexperia to resume exports following negotiations between Chinese President Xi Jinping and US President Donald Trump, and Dutch authorities have expressed willingness to relinquish control of the company provided supply is restored and financial issues are resolved. Nevertheless, the problem persists, and the automotive sector continues to feel its effects.