Honda Motor Co., a leading Japanese automaker, will suspend vehicle production at several major plants in Japan and China in the coming weeks, highlighting the ongoing impact of the global semiconductor shortage triggered by geopolitical tensions surrounding Nexperia.

A company spokesperson confirmed on Thursday that Honda will pause output in Japan on January 5–6, though specific factory locations were not disclosed. Meanwhile, three plants under its Chinese joint venture, Guangqi Honda Automobile Co., are slated for a full shutdown from December 29 to January 2.

Honda had previously anticipated normalizing production disruptions caused by Nexperia’s supply cuts by late November. However, the latest suspensions indicate persistent bottlenecks in the supply chain. Shares of Honda fell over 3% in Tokyo trading, with year-to-date gains remaining below 1%. In U.S. markets, Honda's ADRs (HMC.US) have risen more than 11% this year but significantly underperformed the S&P 500.

The crisis stems from Dutch authorities’ unwarranted intervention against Nexperia—a subsidiary of China’s Wingtech Technology—which disrupted exports of locally manufactured chips. This has severely impacted automakers worldwide, with Honda slashing its sales forecast from 3.62 million to 3.34 million units due to shortages. Earlier, Honda had already reduced or halted output at some North American plants.

Nexperia specializes in automotive semiconductors for critical vehicle functions like wiper control, window operation, and braking systems. Analysts emphasize that Honda’s production halt reflects a *structural* supply gap—not a broad chip shortage—exacerbated by geopolitical trade frictions.

On September 30, the Dutch government invoked emergency powers to place Nexperia under "temporary state supervision," citing governance concerns. China subsequently imposed export controls, blocking Nexperia’s shipments of certain China-made components. While Dutch authorities have since paused their intervention, supply uncertainties persist, as seen in Honda’s latest decision.

The automotive industry’s complex supply chain—where a single missing part can halt production—means even localized disruptions have outsized effects. Switching suppliers requires lengthy requalification processes, and multi-tiered inventory systems often prevent rapid redistribution. Thus, the sector remains caught between structural surpluses and shortages, with no quick fixes in sight.