Honda to temporarily shut down factories in China and Japan because of chip shortage — disruption caused by fallout from on-going conflict within Nexperia

(Image credit: Getty Images)

Honda has announced that it will suspend production at several sites in Japan on January 5 and 6, with reduced operations until January 9. While it’s unclear which factories will be affected, some estimates suggest that it will affect the company’s Suzuka and Saitama plants, which primarily produce vehicles for the domestic market. Aside from this, it will close three factories in China from December 29 through January 2. According to Digitimes, the Japanese car manufacturer had to reduce or halt its operations because of the lack of supply of legacy chips, which it sourced from Nexperia.

While Nexperia does not produce cutting-edge semiconductors like TSMC and Samsung, it’s still one of the largest legacy chip manufacturers in the world. Although these may be cheap parts, they’re still essential components found in every vehicle where they’re used in major systems like power steering and automatic windows. The trouble began in mid-October when the Dutch government seized it from Wingtech, its Chinese owner, following concerns of illegal technology transfers from the Netherlands unit to its China-based parent company.

This move led to an ongoing spat, which involved Beijing, as it blocked the export of certain Nexperia products, negatively impacting the global automotive supply chain. It was also revealed that Washington may have had a hand in the takeover, especially as Wingtech was put on its entity list since 2024. As the weeks rolled by, the Japanese automotive industry said that the conflict could lead to disruption, especially as it can take time before they can either receive components from Nexperia again or find new chip sources. Volkswagen and BMW have reportedly eased production in late October, as car companies are still ringing alarm bells on an automotive chip shortage in mid-November.

There has been some positive development with the issue in recent times, with China allowing the company to resume exports following talks between Chinese President Xi Jinping and U.S. President Donald Trump. The Dutch government also said that it was ready to relinquish its control of Nexperia provided that chip shipments from its China unit have been restarted and its financial issues have been resolved. Despite this, it seems some issues remain unresolved, and the effects are still being felt across the chip supply chain for the automotive industry.

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Jowi Morales is a tech enthusiast with years of experience working in the industry. He’s been writing with several tech publications since 2021, where he’s been interested in tech hardware and consumer electronics.

3 Comments Comment from the forums

pug_s

The question is that why Honda is still making cars in China when there is plenty of competition of EV's there?

Edit: it looks like next year Nexperia will start sourcing wafers from plants in China in the next few months, making the EU company useless at this point.

https://www.reuters.com/world/china/nexperias-china-unit-switches-local-firms-wafer-supplies-document-2025-12-19/
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Max Jacobs

It is puzzling how Honda made great cars in the 80s and afterwards with less advanced chips cannot do the same now ? Did they get stupider?
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bill001g

Maybe start offering cars without all the electronic junk. Most this stuff just add to the dealer profit for things only a tiny number of customer really want. They also spend huge amounts lobbing governments to force feature be required on cars under the guise of saving a child or somehow improving the environment when it mostly is to increase their profit.
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