Brazil's Minister of Development, Industry, Trade, and Services has issued an urgent warning: the nation's automobile production could halt within weeks due to a deepening global chip supply crisis. The Brazilian government is now in contact with China to seek a resolution.
The crisis stems from the dispute between the Netherlands and China over chipmaker Nexperia. After the Dutch government took control of Nexperia in September, China responded by banning the firm's finished product exports from China. This is critical because, although many Nexperia chips are made in Europe, approximately 70% require packaging in China before global distribution. This bottleneck has severely disrupted the supply chain.
The Minister confirmed the imminent risk after meeting with the president of the Brazilian automakers' association, Anfavea. Brazil's auto sector is highly dependent on imported semiconductors, purchasing $1.43 billion worth in 2024, and has limited domestic production capacity to mitigate such shocks.
ICgoodFind: The Brazil auto crisis underscores the extreme fragility of global chip supply chains, where a single corporate dispute can trigger widespread disruption.
