Singapore: A dispute involving Dutch chipmaker Nexperia and its Chinese ownership has continued to ripple through the global auto industry, exposing how fragile supply networks remain even after years of semiconductor shortages.

Nexperia which is headquartered in the Netherlands but owned by China’s Wingtech Technology became the centre of a major supply shock after the Dutch government moved to take temporary control of the company earlier this year. Officials cited concerns over governance and the protection of European technology. The rare step triggered a sharp response from Beijing which temporarily blocked exports of some Nexperia chips produced in China.

The impact was immediate. These chips are inexpensive and not considered high tech but they are essential for basic car functions such as braking systems and window controls. Automakers and parts suppliers across Europe Asia and North America reported disruptions as they struggled to replace the components. Companies including Bosch Hella Nissan and Honda all warned of risks to production.

Although China later eased its restrictions and allowed exports for civilian use many manufacturers say supplies have not fully stabilised. Nexperia itself confirmed that the supply chain remains strained because its Chinese units are not yet operating under a fully restored governance structure.

Automakers say the crisis has revealed how dependent the industry is on a small number of suppliers for even the simplest parts. Some firms had kept small stockpiles and avoided heavy cuts but many others had no backup suppliers because the chips were considered low risk and easily available.

The Dutch government has since suspended its takeover order as talks with China have improved. However industry analysts warn that deeper issues such as political tensions and ownership disputes could trigger new shortages.

For now automakers are reviewing their sourcing strategies and considering whether they need to diversify suppliers or hold larger inventories. The episode has become another sign of how global manufacturing is still vulnerable to diplomatic friction and sudden policy shifts.