The aftermath of the “Anse Semiconductor Incident” has not dissipated! The car core shortage alarm sounded again, and Honda pressed the button to pause car production

The Zhitong Finance App has learned that Honda Motor Co. (Honda Motor Co.), a leader in automobile manufacturing from Japan, will suspend the automobile production process at some large factories in Japan and China in the next few weeks, highlighting that the global automobile chip shortage crisis caused by the “Nexperia (Nexperia) incident” triggered by geopolitical games continues to unfold at some major automakers.

A spokesperson for the Japanese car company said on Thursday local time that Honda will suspend automobile production in Japan on January 5 and January 6, but did not specify which car factories will be affected. Preliminary plans are that all three plants of its joint venture Guangqi Honda Automobile Co. (Guangqi Honda Automobile Co.) in China will stop work from December 29 to January 2.

The automobile manufacturing giant has said that it is expected to get automobile production back on track, which was completely disrupted by Anshi Semiconductor's supply cut in late November, but the imminent suspension of automobile production at some factories indicates that supply chain blockages are still there. Honda's stock price once fell by more than 3% in the Tokyo stock market, and the company's stock price has risen less than 1% since this year. Japanese media reported the news earlier. Honda Motor (HMC.US)'s US ADR trading price has risen by more than 11% since this year, but it has significantly outperformed the S&P 500 index.

In recent months, production plans of car companies around the world have been completely disrupted due to the Dutch government's initiative to launch an unprovoked crackdown on Anshi Semiconductors, after China blocked Nexperia (Nexperia) — a chip product wholly owned by the Chinese technology company Wingtech Technology and produced in its local factory.

Honda can be described as being severely impacted, and the shortage of automotive chips from Anse Semiconductors prompted it to significantly lower its sales forecast from 3.62 million units to 3.34 million units. Previously, Honda had cut or suspended automobile production at some plants in North America due to supply chain issues caused by Anse Semiconductors.

Anshi Semiconductor mainly produces automotive semiconductor products used in vehicle control systems. Application functions include starting wipers, opening car windows, and central braking control systems.

The nature of Honda's “lack of core” is more biased towards supply disruptions caused by geopolitical/trade frictions

According to some semiconductor analysts, Honda's temporary suspension of production is definitely not a return to a “total shortage of global automotive chips,” but rather a “structural breakpoint” in the important automotive chip chain related to Anshi Semiconductors during a specific period of time, in a specific category, and on a specific shipping route. It has been amplified by the characteristics of automobiles “stopping the line without a single piece”.

On September 30, the Dutch Ministry of Economic Affairs invoked the seldom used emergency law “Goods Availability Act” (Goods Availability Act) to unwarranted “national supervision/temporary takeover intervention” against Nexperia (Anse Semiconductor), a semiconductor company headquartered in Nijmegen, the Netherlands. The official reason was that the company had serious governance flaws and was concerned that key chip production capacity and technical capabilities might be “unavailable” in times of crisis, requiring state intervention to guarantee supply and local European capacity.

Shortly thereafter, the Chinese side issued an export control notice prohibiting Nexperia China and its subcontractors from exporting specific finished components and semi-finished products manufactured in China. As Nexperia's sealing and testing chain in China was completely blocked, there was a serious shortage of commonly used vehicle regulation devices (mostly discrete, power/basic devices), causing many car manufacturers, including European luxury car manufacturers, to temporarily stop production.

Currently, the Dutch government has announced the suspension of previous intervention measures against Nexperia, but uncertainty about the supply of automotive chips caused by this geopolitical incident still exists, which is mainly reflected in Honda's announcement that it will temporarily stop production.

The “missing core” indicated by Honda's round of production stops/production cuts is highly related to the Anse Semiconductor incident. Automobile production is a system project where “one material is out of line”. As a result, the supply chain shock caused by the “Anshi Semiconductor Incident” continues, creating a phased and structural risk of material shortages for the global automotive industry (not another “big lack of core” for all categories or industries).

The automobile manufacturing industry is a typical BOM long-tail industry: a car may require thousands of semiconductors/electronic components, and as long as one of them is out of stock, it cannot go offline. Even if “many MCUs/simulations” are piled up in the channel, as long as Honda is really lacking a device with a certain AEC vehicle specification number, specific package, and specific parameter window, excess inventory is of little help to it. Therefore, the common state of the automotive chip supply chain is “structural excess + structural shortage” at the same time.

More importantly, chip supply chain replacement on the automotive side cannot be completed in a short period of time: vehicle specification number switching requires re-verification/certification, and reoperation of reliability and functional safety; the Tier-1/Tier-2 multi-level structure often causes inventory to be “elsewhere” and may not necessarily flow quickly to Honda's production line.