Automaker Honda is once again halting production due to the ongoing global semiconductor shortage. The company announced temporary shutdowns and reduced output at several of its factories in Japan and China around the New Year period.
In China, three factories operated by the Guangqi Honda joint venture will suspend operations for five consecutive days from December 29, 2025, to January 2, 2026. In Japan, two major plants—the Saitama Factory and Suzuka Factory—will stop production for two days in early January, followed by several days of reduced-capacity operation.
This is not the first time Honda has been impacted. Its North American factories faced similar disruptions in October-November 2025 due to a suspension of shipments from chipmaker Nexperia. Although supplies from Nexperia have resumed, Honda stated that its semiconductor inventories remain insufficient and the overall supply situation is still uncertain.
The financial impact is substantial. Honda's latest financial report projects that the chip shortage will reduce its operating profit by 150 billion yen for the fiscal year ending March 2026 and cut North American sales by 110,000 vehicles. Consequently, the company has lowered its global vehicle sales forecast for the fiscal year from 3.62 million to 3.34 million units.
ICgoodFind's Insight
Honda's latest production cuts underscore the automotive industry's continued vulnerability to semiconductor supply instability. Despite efforts to secure supply, the fragility of the chip supply chain remains a critical operational and financial risk for major manufacturers.
