The aftermath of the "AN Shi Semiconductor Incident" is still ongoing! The car chip shortage alarm sounds again, Honda presses the pause button on car production.

The leading car manufacturer from Japan, Honda Motor Co., Ltd. Sponsored ADR (Honda Motor Co.), will temporarily halt car production processes at some of its large factories in Japan and China in the coming weeks, highlighting that the global car chip shortage caused by the political maneuvers of GEO Group Inc.'s "Nexperia incident" is still ongoing for some major car manufacturers. A spokesperson for the Japanese carmaker stated on Thursday local time that Honda will suspend car production in Japan on January 5th and 6th and did not specify which car factories would be affected. The three factories of its joint venture in China, Guangqi Honda Automobile Co., Ltd. Sponsored ADR (Guangqi Honda Automobile Co.), are preliminarily planned to shut down from December 29th to January 2nd. The automotive giant had previously stated that it expected to return to normal car production disrupted by the Nexperia incident starting from late November, but the upcoming halt in production at some factories indicates that bottlenecks in the supply chain still exist. Honda's stock price in Tokyo's stock market fell by over 3% at one point, with the company's stock price gaining less than 1% so far this year. Japanese media had reported the news earlier. Honda Motor Co., Ltd. Sponsored ADR (HMC.US) stock has risen by over 11% this year, but significantly lagging behind the S&P 500 index. In recent months, due to unwarranted pressure from the Dutch government against Nexperia, a Chinese-owned company by Wingtech Technology, after blocking Nexperia's export of locally produced chip products, disrupted production plans of car manufacturers worldwide. Honda has been severely impacted, with the car chip shortage from Nexperia prompting the company to significantly reduce its sales forecast from the previous estimate of 3.62 million units to 3.34 million units. Earlier, due to supply chain issues caused by Nexperia, Honda had cut back or suspended car production at some factories in North America. Nexperia primarily produces automotive semiconductor products for vehicle control systems, with applications including starting windshield wipers and opening windows, and brake control central systems. The root cause of Honda's chip shortage is more closely related to the supply disruption caused by the political/trade tensions of GEO Group Inc. According to some semiconductor analysts, Honda's temporary halt in production is not a return to the "global car chip shortage," but a "structural breakpoint" in the chain of critical automotive chips related to Nexperia at specific times, categories, and shipments, magnified as a major event in car production disturbances under the characteristic of "stop production if a single component is missing." On September 30th, the Dutch Ministry of Economic Affairs invoked the rarely used emergency law "Goods Availability Act" to unreasonably implement "national supervision/temporary takeover-style intervention" on Nexperia, headquartered in Nijmegen, Netherlands, citing serious governance defects in the company and concerns that key chip production capacity and technological capabilities might not be available in a crisis, requiring national intervention to safeguard supply and European local capabilities. Shortly thereafter, China issued an export control notice, banning Nexperia China and its subcontractors from exporting specific finished components and semi-finished products manufactured in China. With Nexperia's packaging/testing/shipping chain in China completely blocked, there was a severe shortage of commonly used automotive components (mostly discrete/power/basic components), leading to temporary halts in production for many car manufacturers, including European luxury carmakers. The Dutch government has since announced the suspension of its intervention measures against Nexperia, but the uncertainty in car chip supply caused by the GEO Group Inc. political event still exists, as reflected in Honda's announcement of a temporary halt in production. The chip shortage targeted by Honda's current production reduction is highly relevant to the Nexperia incident, as car production is a system engineering process where a missing component can halt the entire production line. Therefore, the impact of the Nexperia incident on the supply chain is ongoing, posing structural material risks (rather than a widespread shortage across all categories and industries) to the global automotive industry. The automotive manufacturing industry is a typical long-tail industry where a car may require thousands of semiconductor/electronic components, and production cannot proceed if any of them are unavailable. Even if "many MCUs/analog" are piled up in the channel, if what Honda truly lacks is a particular AEC car regulations number, specific package, or device with specific parameters, surplus inventory is of little help to it. Therefore, the common state of the automotive chip supply chain is the simultaneous presence of "structural surplus + structural shortage." Moreover, the substitution of the automotive chip supply chain cannot be accomplished in the short term: switching car regulations numbers requires re-validation/certification, rerunning reliability and functional safety; the multi-tiered structure of Tier-1/Tier-2 often means that inventory is "elsewhere" and may not flow quickly to Honda's production line.