M&M Says Chip Supply 'Well Covered' in Short Term Amid Nexperia Fallout

Mahindra & Mahindra Ltd.’s management on Tuesday said that the automaker remains “well covered” in the short term on semiconductor supply, despite the turmoil surrounding the chipmaker Nexperia, whose seizure by the Netherlands government and subsequent Chinese retaliation have raised concerns over potential supply chain disruptions.

“We are covered well in the short term,” said Rajesh Jejurikar, Executive Director and CEO (Auto and Farm Sectors), Mahindra & Mahindra. “When anything happens on the supply chain side, we take that very seriously and start putting in multiple actions to mitigate and overcome risks. We have done that very well for rare earths, and similarly, we are well covered on the chip front.”

Jejurikar said the Nexperia chip was “a very low-value, commodity-like” component, making it easier to de-risk through alternative sourcing. “There are multiple geopolitical conversations happening on resolving the issue that should hopefully address the situation by itself, but that notwithstanding, we have put in place actions, and in the short term, we are reasonably well covered,” he said.

Anish Shah, Group CEO & Managing Director of M&M Ltd., added that the company’s experience during the pandemic-era chip shortage had strengthened its preparedness. “The semiconductor crisis prepared us to react to many kinds of disruptions that came after that. (On Nexperia) We don’t see any significant risk at this time,” Shah said.

Jejurikar added that M&M has also mitigated exposure to rare-earth supply from China. “We have taken multiple actions around substitution and sourcing. We are well covered for at least this financial year and have no risk on China for this financial year (FY26),” he said.

The Nexperia Crisis

In mid-October, the Netherlands government made an unprecedented move in Europe’s semiconductor sector by seizing control of Nexperia, a major European chipmaker owned by China’s Wingtech Technology, citing national security concerns.

The Dutch government alleged that Nexperia’s Chinese leadership was attempting to dismantle European operations and transfer production to China—plans reportedly involving layoffs of 40% of European staff and the closure of an R&D centre in Munich.

Beijing responded swiftly. China’s Ministry of Commerce blocked exports of critical chip components from Nexperia’s Chinese subsidiaries to Europe and other markets. The result: a global ripple effect through the automotive sector, already grappling with fragile supply chains.

Nexperia supplies essential semiconductor parts—such as diodes, transistors, and logic devices—used in almost every modern vehicle’s electronic control system. These components play a critical role in the functioning of key automotive systems, including battery management, braking, and various sensor modules.

According to S&P Global Mobility, Nexperia holds roughly 5% of the global automotive silicon discrete market, concentrated largely in Europe. That small market share belies its importance: as automakers learned during the pandemic, even minor shortages can immobilize production lines.

Most of Nexperia’s chips are designed and fabricated in Europe, then shipped to China’s Dongguan facility—which accounts for nearly 70% of its output—for packaging and testing. When Beijing restricted exports, that critical final step effectively froze supply.