Stabilizing the supply chain transcends the realm of high-end technologies and large-scale projects; it also hinges on fundamental components, basic processes, and underlying logic. Looking ahead, beyond the pursuit of cutting-edge processes, AI chips, and computing power transformations, the security of supply for mature processes and essential devices must also be elevated to a strategic level.

Amidst the global semiconductor industry's unrelenting quest for advanced processes and high-performance chips, the seemingly 'inconsequential' basic devices often go unnoticed. However, the escalating Nexperia incident since late September 2025 has underscored the 'lifeline' importance of these fundamental components to the entire automotive industry chain.

To comprehend why the Anshi incident could disrupt global automotive production lines within mere weeks, we can trace the context (a Chinese term denoting the 'context' or 'sequence of events') through a series of statements from the Ministry of Commerce. According to official public information, the incident originated from an administrative order issued by the Dutch government in late September 2025, followed by judicial rulings that ignited controversy over Nexperia's internal governance. This led to Nexperia (Netherlands) halting wafer supplies to Nexperia (China) on October 26, 2025, disrupting normal production at Chinese factories and creating a significant 'supply chain breakpoint.' During a Ministry of Commerce press conference, it was explicitly stated that this supply halt directly triggered turmoil and chaos in the global semiconductor supply chain, prompting China to initiate 'export exemptions' on November 1 to restore production line operations and prevent further escalation.

On November 26, 2025, during a video conference between the Ministry of Commerce and EU Trade and Economic Security Commissioner Šefčovič, both sides reaffirmed a critical fact: the root cause of this supply chain chaos had not been entirely eradicated, with some administrative and judicial interventions persisting, and material flows between Nexperia China and Nexperia Netherlands yet to normalize. The EU also acknowledged during the talks that China's previous measures 'averted a global semiconductor supply chain crisis,' though the overall situation still necessitated de-escalation and coordination.

From official statements, it is clear that this was not merely a theoretical dispute but a tangible, physically significant supply chain disruption. This break directly impacted wafers and discrete devices, cascading from these 'seemingly insignificant basic components' to automotive production scheduling and global inventories.

In essence, what truly shook the global industry chain in the Nexperia incident were the mature processes and low-value discrete devices long deemed 'the least likely to encounter surprises.' They resemble the tiniest capillaries in automotive electronic systems, and when these capillaries are obstructed, the entire system may slow down or even halt.

Although 'partial relief' signals emerged in mid-to-late November 2025, including China's renewed export exemptions, the Dutch suspension of some administrative measures, and ongoing high-level corporate communications, Nexperia's internal updates and customer briefings still emphasized: the supply chain had not returned to normalcy, with production and delivery timelines for some products remaining unstable.

Mature processes, discrete devices, transnational governance disputes, supply chain breakpoints... All these key factors converged to create the backdrop of this chaos. What truly prompts reflection is why the most inconspicuous components became the most vulnerable and easily disrupted points in the global supply chain.

How Capillaries Accidentally Blocked the Global Supply Chain

When we delve into the foundation of the automotive electronics supply chain—such as automotive-grade diodes, MOSFETs, transistors, and basic logic discrete ICs—we uncover a critical reality that is often overlooked: these 'mature process devices' are not as simple, easily replaceable, or cheaply stable as commonly assumed. On the contrary, they often perform key functions that determine the continuous operation of automotive production lines, and once supply chains break, their impact on vehicle manufacturing can be rapid and profound.

These discrete devices lack the allure of MCUs or high-computing chips, being perceived as low-cost, low-tech-threshold, and high-demand 'stable production and supply' components. Many automakers and Tier 1 suppliers habitually classify them as low-risk, exclude them from intensive monitoring, and maintain only 3-6 weeks of inventory. This habitual neglect amplified the risks of this supply chain shock. In reality, mature process capacity is not infinitely replaceable or instantly replicable. Stable, compliant, and automotive-certified discrete device production lines are extremely limited, with few suppliers meeting the automotive industry's stringent consistency, durability, and reliability requirements. Once transnational governance structures change, even temporary supply halts create severe gaps due to scarce alternative capacity and lengthy certification processes.

More critically, these gaps are not as easily filled as those for advanced chips. For discrete devices, alternative suppliers require not just production capabilities but also compliant part numbers that have undergone PPAP, AEC-Q, functional safety, and other automotive certification processes. Even with potential suppliers, revalidation takes weeks to months, far from meeting short-term production recovery needs. Meanwhile, automakers' internal attention to these 'basic components' is minimal: procurement, inventory, and certification systems lack equivalent risk prevention mechanisms.

Furthermore, the 'high volume but widespread distribution' characteristic of discrete devices amplifies the systemic disruption impacts. A single car may contain numerous low-voltage devices across power modules to body control units, meaning a shortage of just one specification can halt assembly of a functional module, triggering production line stops, scheduling delays, and shipment postponements. Unlike past reductions caused by MCU or high-end power chip shortages, this shock has broader coverage and greater scope, making it harder to mitigate through emergency scheduling or priority supply.

Thus, the Nexperia incident reveals not an individual supplier issue but a structural vulnerability long ignored by the automotive electronics industry: mature processes and discrete devices are not disposable 'consumables' but foundational pillars of modern automotive supply chain stability. Once these pillars shake, the entire supply chain may be destabilized and restructured.

Therefore, amidst this chaos, global automotive industry stakeholders must re-recognize the strategic value of mature processes and basic devices, stripping them from the traditional perception of 'low-cost, high-volume' and granting them a level of importance (a Chinese term meaning 'level of importance') comparable to high-end chips.

Reassessing the Resilience and Value of Mature Processes

The cascading supply halt crisis exposed by the Anshi incident forces the automotive industry to re-examine its past 'lowest-cost, broadest-supply, controllable-risk' supply chain logic. Does this traditional strategy remain viable? Will mature processes gradually transform into key assets requiring 'strategic pricing'?

Firstly, profound shifts are occurring at the policy level and in industrial safety awareness. Historically, Western support for semiconductors focused on the most advanced process nodes, but the Anshi incident reminds the globe: advanced processes alone cannot secure automotive supply chains. The more widely used yet long-underestimated basic discrete devices are equally indispensable lifelines. Over the next few years, we will likely see increasing policy tendencies toward localizing mature processes and ensuring power and discrete device supply security.

For automakers and Tier 1 suppliers, supply chain strategy priorities will shift. Low-cost devices will no longer rely on single suppliers, single paths, or lowest purchase prices but will incorporate multi-sourcing, redundancy, parallel certifications, and moderate safety inventory systems. Discrete devices may join power semiconductors and MCUs as strategic bill-of-material components, subject to continuous monitoring and risk assessment. Supplier management will extend beyond Tier 1 to Tier 2, Tier 3, and deeper tiers, ensuring stable capacity, traceable qualifications, and delivery guarantees for every basic component.

Meanwhile, China's supply chain faces new opportunities and challenges. As one of the global hubs for mature process and discrete device capacity, China boasts a relatively complete production system and supply base. However, the Anshi incident also shows: even with sufficient capacity, unstable transnational governance chains can constrain domestic capabilities. China's supply chain future hinges not just on enhancing capacity and cost competitiveness but also on improving local industrial structure, strengthening compliance and intellectual property protection, and boosting autonomy in materials and packaging/testing equipment. It must actively engage in global division of labor while ensuring full domestic control over critical supply chains.

A deeper change is the shift in industry mindset. Previously, supply chain resilience was seen as an extra cost and 'insurance,' but future resilience will become a core asset for delivery stability and brand reputation. While low-cost devices reduce expenses, supply interruptions carry far higher risks and costs than expected. The global industry is beginning to accept that stable supply is no longer a simple matter of 'having an extra supplier' but requires resource investment in infrastructure, much like building charging networks—regardless of profit margins, stability and security are indispensable.

The Nexperia incident marks only the beginning of this supply chain restructuring. Amidst technological innovation, geopolitical volatility, and regulatory scrutiny, those who can truly transform mature processes, discrete devices, and packaging/testing capabilities into strategic assets will prevail in the next supply chain shock. Conversely, those who still treat them as disposable cost items will eventually be struck by the most minute disruptions.

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Article: Auto Review

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