A battle for control of a little-known chipmaker has threatened global auto production by choking off the semiconductor supply chain, though there are signs the crisis is inching toward a resolution.

The power struggle over Nexperia, a Chinese-owned Dutch semiconductor maker, highlights how technology supply chain vulnerabilities are squeezing auto makers, most notably forcing Honda to halt production at a Mexican factory making its popular HR-V crossover for North American markets. It also exposes how Europe is caught in the middle of the wider geopolitical showdown between Washington and Beijing.

Here’s a look at the dispute:

The turmoil erupted into public view in mid-October, when the Dutch government announced it had invoked a rarely used World War II-era law to take effective control of Nexperia weeks earlier.

The Dutch ministry of economic affairs said it took action because of national security concerns. Officials said they intervened because of “serious governance shortcomings” at Nexperia, asserting control to prevent the loss of crucial tech know-how that could threaten Europe’s economic security.

Nexperia’s Chinese owner Wingtech Technology, a partially state-owned company, is at the heart of the dispute. Amid the boardroom battle, a Dutch court granted the ministry’s request to oust Nexperia’s Chinese CEO Zhang Xuezheng. American officials told the Dutch government he would have to be replaced to avoid trade restrictions, according to a court filing.

Nexperia makes simple semiconductors such as switches and logic chips. The auto industry — one of Nexperia’s biggest markets — uses its chips for numerous functions, such as adaptive LED headlight controllers, electric vehicle battery management systems and anti-lock brakes.

Headquartered in the Dutch city of Nijmegen, Nexperia was spun off from Philips Semiconductors two decades ago. It was eventually purchased by China’s Wingtech Technology in 2018 for $3.6 billion.

Nexperia has wafer fabrication plants in Britain and Germany. It operates an assembly and testing center in China’s southern manufacturing heartland of Guangdong — which accounts for around 70% of its end-product capacity — and similar centers in the Philippines and Malaysia.

The dispute is part of the broader struggle between the U.S. and China over tech supremacy, which has left Europe caught in the middle.

It stems from Washington’s decision late last year to place Wingtech on its “entity list,” which subjects companies to export controls because of national security risks. In late September, the U.S. expanded that list to Wingtech’s subsidiaries, including Nexperia, pressuring allies to follow suit.

After the Dutch government asserted control of Nexperia, Beijing responded soon after, blocking the export of Nexperia chips from its assembly plant in the Chinese city of Dongguan. It blamed the Netherlands for “turmoil and chaos” in the chip supply chain.

There were signs of hope following last month’s high-profile meeting between U.S. President Donald Trump and Chinese leader Xi Jinping, when the White House said Beijing would ease the export ban as part of a U.S.-China trade truce.

Despite Beijing also confirming exports would be allowed to resume, Nexperia’s Chinese unit said headquarters suspended shipments of wafers used to make chips to its Chinese factory, potentially crimping its ability to deliver finished products.

Nexperia’s head office hit back in a statement Wednesday, saying the Chinese unit refused to pay for the wafers and accused it of “ignoring the lawful instructions” from its global management team. The company said it can’t guarantee the quality of any chips delivered from its China plant since October 13.

Modern automobiles rely on so-called discrete chips made by companies like Nexperia, which, unlike more advanced microprocessors, perform a single function. Leaders at big carmakers spelled out their worries in the latest round of earnings calls, saying that finding a replacement for Nexperia at scale in the short term will be difficult.

“While Nexperia makes up only about 5% of the automotive silicon discrete market in term of revenue, its share is much higher in terms of discrete chip volume,” S&P Global Mobility analysts wrote in a recent note.

Nexperia’s parts are widely used across vehicle systems — often dozens to hundreds per vehicle — and carmakers in North America, Japan and South Korea are at risk, they added.

“It’s an industrywide issue. A quick breakthrough is really necessary to avoid fourth quarter production losses for the entire industry,” Ford CEO Jim Farley said.

General Motors CEO Mary Barra warned that production could be hit. The company has “teams working around the clock with our supply chain partners to minimize possible disruptions,” she said.

Nissan CEO Ivan Espinosa told CNBC that the company is setting aside a 25 billion yen ($163 million) provision for supply risks, in part to “absorb” the impact from the Nexperia crisis on production.

Mercedes-Benz is “scurrying around the world to look for alternatives,” CEO Ola Kallenius said. The European Automobile Manufacturers’ Association said members including BMW, Renault, Volkswagen and Volvo have been forced to use their reserve stockpiles of chips and warned of assembly line stoppages if they run out.

The European Union’s trade commissioner, Maros Sefcovic, on Saturday noted “encouraging progress,” writing on X that China’s Commerce Ministry had confirmed “further simplification” of export procedures for Nexperia chips to the EU and global customers.

In Beijing, the Commerce Ministry also said Saturday that it agreed to a Dutch request to send representatives to China for “consultations.”

But it noted that the Netherlands had not taken any concrete actions yet to restore the global semiconductor supply chain since the Dutch government said days earlier it would take “appropriate steps on our part where necessary.”

Economics Affairs Minister Vincent Karremans had said in that statement that “the Netherlands trusts that the supply of chips from China to Europe and the rest of the world will reach Nexperia’s customers over the coming days.”

Honda has received word that Nexperia’s shipments from China have resumed, Executive Vice President Noriya Kaihara told reporters Friday. He said the Japanese automaker expects to resume production during the week of Nov. 21 at its plant in Celaya, Mexico, which can make up to 200,000 vehicles a year.

Published – November 10, 2025 09:34 am IST

U.S voter anger over the cost of living is hurtling forward into next year’s midterm elections, when pivotal contests will be decided by communities that are home to fast-rising electric bills or fights over who’s footing the bill to power Big Tech’s energy-hungry data centres.

Electricity costs were a key issue in this week’s elections for governor in New Jersey and Virginia, a data centre hotspot, and in Georgia, where Democrats ousted two Republican incumbents for seats on the state’s utility regulatory commission.

Voters in New Jersey, Virginia, California and New York City all cited economic concerns as the top issue, as Democrats and Republicans gird for a debate over affordability in the intensifying midterm battle to control Congress.

Already, U.S. President Donald Trump is signaling that he’ll focus on affordability next year as he and Republicans try to maintain their slim congressional majorities, while Democrats are blaming Trump for rising household costs.

Front and center may be electricity bills, which in many places are increasing at a rate faster than U.S. inflation on average — although not everywhere.

“There’s a lot of pressure on politicians to talk about affordability, and electricity prices are right now the most clear example of problems of affordability,” said Dan Cassino, a professor of politics and government and pollster at Fairleigh Dickinson University in New Jersey.

Rising electric costs aren’t expected to ease and many Americans could see an increase on their monthly bills in the middle of next year’s campaigns.

Gas and electric utilities are seeking or already secured rate increases of more that $34 billion in the first three quarters of 2025, consumer advocacy organisation PowerLines reported. That was more than double the same period last year.

With some 80 million Americans struggling to pay their utility bills, “it’s a life or death and ‘eat or heat’ type decision that people have to make,” said Charles Hua, PowerLines’ founder.

In Georgia, proposals to build data centres have roiled communities, while a victorious Democrat, Peter Hubbard, accused Republicans on the commission of “rubber-stamping” rate increases by Georgia Power, a subsidiary of power giant Southern Co.

Monthly Georgia Power bills have risen six times over the past two years, now averaging $175 a month for a typical residential customer.

Hubbard’s message seemed to resonate with voters. Rebecca Mekonnen, who lives in the Atlanta suburb of Stone Mountain, said she voted for the Democratic challengers, and wants to see “more affordable pricing. That’s the main thing. It’s running my pocket right now.”

Now, Georgia Power is proposing to spend $15 billion to expand its power generating capacity, primarily to meet demand from data centres, and Hubbard is questioning whether data centres will pay their fair share — or share it with regular ratepayers.

Midterm elections will see congressional battlegrounds in states where fast-rising electric bills or data centre hotspots — or both — are fomenting community uprisings.

That includes California, Georgia, Michigan, Ohio, Pennsylvania and Texas.

Analysts attribute rising electric bills to a combination of forces.

That includes expensive projects to modernise the grid and harden poles, wires and substations against extreme weather and wildfires.

Also playing a role is explosive demand from data centres, bitcoin miners and a drive to revive domestic manufacturing, as well as rising natural gas prices, analysts say.

“The cost of utility service is the new ‘cost of eggs’ concern for a lot of consumers,” said Jennifer Bosco of the National Consumer Law Center.

In some places, data centres are driving a big increase in demand, since a typical AI data centre uses as much electricity as 100,000 homes, according to the International Energy Agency. Some could require more electricity than cities the size of Pittsburgh, Cleveland or New Orleans.

While many states have sought to attract data centres as an economic boon, legislatures and utility commissions were also flooded with proposals to try to protect regular ratepayers from paying to connect data centres to the grid.

Meanwhile, communities that don’t want to live next to one are pushing back.

An Associated Press-NORC Center for Public Affairs Research poll from October found that electricity bills are a “major” source of stress for 36% of U.S. adults.

Now, as falls turns to winter, some states are warning that funding for low-income heating aid is being delayed because of the federal government shutdown.

Still, the impact is still more uneven than other financial stressors like grocery costs, which just over half of U.S. adults said are a “major” source of stress.

And electric rates vary widely by state or utility.

For instance, federal data shows that for-profit utilities have been raising rates far faster than municipally owned utilities or cooperatives.

In the 13-state mid-Atlantic grid from Illinois to New Jersey, analysts say ratepayers are paying billions of dollars for the cost to power data centres — including data centres not even built yet.

Next June, electric bills across that region will absorb billions more dollars in higher wholesale electricity costs designed to lure new power plants to power data centres.

That’s spurred governors from the region — including Pennsylvania’s Josh Shapiro, Illinois’ JB Pritzker and Maryland’s Wes Moore, all Democrats who are running for reelection — to pressure the grid operator PJM Interconnection to contain increases.

Drew Maloney, the CEO of the Edison Electric Institute, a trade association of for-profit electric utilities, suggested that only some states are the drivers of higher average electric bills.

“If you set aside a few sates with higher rates, the rest of the country largely follows inflation on electricity rates,” Maloney said.

Examples of states with faster-rising rates are California, where wildfires are driving grid upgrades, and those in New England, where natural gas is expensive because of strained pipeline capacity.

Still, other states are feeling a pinch.

In Indiana, a growing data centre hotspot, the consumer advocacy group, Citizens Action Coalition, reported this year that residential customers of the state’s for-profit electric utilities were absorbing the most severe rate increases in at least two decades.

Republican Gov. Mike Braun decried the hikes, saying “we can’t take it anymore.”

The mistrial was confirmed by William Fick, a lawyer for Anton Peraire-Bueno at Fick & Marx [File]
| Photo Credit: REUTERS

In the race for AI dominance, American tech giants have the money and the chips, but their ambitions have hit a new obstacle: electric power.

“The biggest issue we are now having is not a compute glut, but it’s the power and…the ability to get the builds done fast enough close to power,” Microsoft CEO Satya Nadella acknowledged on a recent podcast with OpenAI chief Sam Altman.

“So if you can’t do that, you may actually have a bunch of chips sitting in inventory that I can’t plug in,” Nadella added.

Echoing the 1990s dotcom frenzy to build internet infrastructure, today’s tech giants are spending unprecedented sums to construct the silicon backbone of the revolution in artificial intelligence.

Google, Microsoft, AWS (Amazon), and Meta (Facebook) are drawing on their massive cash reserves to spend roughly $400 billion in 2025 and even more in 2026, backed for now by enthusiastic investors.

All this cash has helped alleviate one initial bottleneck: acquiring the millions of chips needed for the computing power race, and the tech giants are accelerating their in-house processor production as they seek to chase global leader Nvidia.

These will go into the racks that fill the massive data centres, which also consume enormous amounts of water for cooling.

Building the massive information warehouses takes an average of two years in the United States; bringing new high-voltage power lines into service takes five to 10 years.

The “hyperscalers,” as major tech companies are called in Silicon Valley, saw the energy wall coming.

A year ago, Virginia’s main utility provider, Dominion Energy, already had a data-centre order book of 40 gigawatts, equivalent to the output of 40 nuclear reactors.

The capacity it must deploy in Virginia, the world’s largest cloud computing hub, has since risen to 47 gigawatts, the company announced recently.

Already blamed for inflating household electricity bills, data centres in the United States could account for 7 percent to 12 percent of national consumption by 2030, up from 4 percent today, according to various studies.

But some experts say the projections could be overblown.

“Both the utilities and the tech companies have an incentive to embrace the rapid growth forecast for electricity use,” Jonathan Koomey, a renowned expert from UC Berkeley, warned in September.

As with the late 1990s internet bubble, “many data centers that are talked about and proposed and in some cases even announced will never get built.”

If the projected growth does materialise, it could create a 45-gigawatt shortage by 2028, equivalent to the consumption of 33 million American households, according to Morgan Stanley.

Several US utilities have already delayed the closure of coal plants, despite coal being the most climate-polluting energy source.

And natural gas, which powers 40 percent of data centres worldwide, according to the International Energy Agency, is experiencing renewed favor because it can be deployed quickly.

In the US state of Georgia, where data centres are multiplying, one utility has requested authorisation to install 10 gigawatts of gas-powered generators.

Some providers, as well as Elon Musk’s startup xAI, have rushed to purchase used turbines from abroad to build capability quickly. Even recycling aircraft turbines, an old niche solution, is gaining traction.

“The real existential threat right now is not a degree of climate change. It’s the fact that we could lose the AI arms race if we don’t have enough power,” Interior Secretary Doug Burgum argued in October.

Tech giants are quietly downplaying their climate commitments. Google, for example, promised net-zero carbon emissions by 2030 but removed that pledge from its website in June.

Instead, companies are promoting long-term projects.

Amazon is championing a nuclear revival through Small Modular Reactors (SMRs), an as-yet experimental technology that would be easier to build than conventional reactors.

Google plans to restart a reactor in Iowa in 2029. And the Trump administration announced in late October an $80 billion investment to begin construction on ten conventional reactors by 2030.

Hyperscalers are also investing heavily in solar power and battery storage, particularly in California and Texas.

The Texas grid operator plans to add approximately 100 gigawatts of capacity by 2030 from these technologies alone.

Finally, both Elon Musk, through his Starlink programme, and Google have proposed putting chips in orbit in space, powered by solar energy. Google plans to conduct tests in 2027.

Published – November 10, 2025 08:42 am IST