This week’s supply chain risk news
Nexperia: Tensions again flare over control of key producer of chips for cars
Things haven’t been great for a while now between the Chinese company Wingtech and its Dutch unit Nexperia. In recent months, tensions between the Netherlands and China over Nexperia have disrupted automotive supply chains. The company “produces billions of chips for cars and electronics,” per Reuters. The latest developments haven’t exactly been soothing.
An open letter from the Dutch chipmaker last week said attempts to engage with Nexperia China had failed. A day later, Wingtech alleged its Dutch unit is trying to build a separate supply chain without China. Nexperia’s Chinese arm also “demanded the Dutch business halt overseas expansion, including in Malaysia,” Reuters reports.
The Chinese unit argued its Dutch counterparts plan to vastly expand a Malaysian plant, aiming to source 90 percent of production outside China by the middle of next year. As a result, Wingtech hinted the disruptions to supply chains might not be over, saying the situation is “far more than a simple corporate control dispute.” On that, we can all agree.
Affordable and widely available memory chips—now just a memory
Demand for memory chips is at a point where A.I. and consumer-electronics companies have to fight for supplies. It is no wonder that Japanese electronics stores are limiting how much hardware one person can buy.
The memory squeeze goes for everything from chips for smartphones to the kind used in data centers for artificial intelligence.
That’s made it possible for memory chip companies like Micron to practically name their price. Companies like Google, Meta, Amazon, and Microsoft have reportedly told the company they’ll take as much as they can buy, regardless of the cost.
Other firms like SK Hynis and Samsung are working to add more capacity. Unfortunately, new factories will take more than a year to finish building. Such outlays aren’t cheap, and may be particularly daunting in a moment when some experts are asking if we’re in the midst of an A.I. bubble—and what might happen if it pops.
Some of these investments in building transformers could be… transformative
The demand for new power transmission equipment in the U.S. is driving companies like Hitachi Energy, Siemens, GE, Hyosung HICO, and others to make big investments in new factories. The reasons are many, including grid modernization, renewable energy, electric cars, and the thirst for electricity from data centers and A.I.
Equipment like transformers is in high demand and short supply. The U.S. is reportedly their biggest importer, currently. Hitachi Energy is planning to spend more than a billion dollars on U.S. manufacturing infrastructure. That includes some $457 million for a new transformer facility in South Boston. Plus, the company has earmarked another $106 million to make transformer components in Alamo, Tennessee.
Siemens hopes to open a $150 million transformer factory in Charlotte, North Carolina, early next year. In addition, Hyosung HICO plans to put $157 million into expanding its transformer plant in Memphis, Tennessee. And even with all that added production, transformer prices could keep ticking up over the next several years.
Rethinking risk management in logistics
A lot can go wrong when you’re depending on a shipment to get from point A to point B. Geopolitical issues, port strikes, extreme weather… The list goes on.
Of course, making informed decisions proactively can help you avoid having to fight fires amid the face of logistical disruptions. But there’s a case for a broader shift in perspective—one that focuses on resilience rather than putting raw efficiency above all else. This can help make your operations less brittle when disruptions arise.
It also helps to recognize that there are some aspects of your supply chain your business can’t control—and to focus on what you can help.
Identifying emerging risks and sorting possible contingencies involves too much data to puzzle together manually. Furthermore, historical trends alone aren’t enough to predict the future in a world of climate shifts and geopolitical instability. That’s why predictive analytics are key for decision-makers managing logistical risk.
We have more insights on rethinking logistics risk management on our blog.
Other stories we’re reading and monitoring
The White House says it will exempt “U.K.-origin pharmaceuticals, pharmaceutical ingredients, and medical technology” from President Donald Trump’s tariffs. That’s as part of a broader deal involving U.K. spending on medicines.
The global merchandise trade got a boost earlier this year when American importers frontloaded orders to get ahead of U.S. tariffs. But the World Trade Organization says that uptick has since faded.
One in three member companies in the European Union Chamber of Commerce in China wants to shift sourcing to sidestep Beijing’s export controls, accordingly to a flash survey.
