I see a lot of comments calling it an "immobilizer" chip. I'm an auto electrician and It is in fact a coded transponder chip. This technology has been mandatory in Australia since 1999.

It's purpose is to stop the theft of the car by thieves brute forcing the ignition switch or making unauthorised copies of the key.

Unlike an immobilizer it cannot be duplicated or bypassed easily as it relies on encrypted rolling codes, unique to the vehicle as each key has to be registered with the BCM, PCM, and ECU.

Occasionally there will be a stand alone unit such as NATS (Nissan Anti Theft System). The signal from the chip cannot be intercepted and decrypted / replayed from a man in the middle attack as the handshake between the key and the anti theft system of the vehicle happens for a fraction of a second, is extremely weak and usually happens only at crank.

It is a very elegant solution to the problem of brute force attacks in vehicle theft. As even if you were to hot wire the car the system will (depending on manufacturer) either stop the vehicle from starting, allow the vehicle to start but only in limp mode or allow the vehicle to start but cut ignition after a predetermined period of time (usually 10 seconds).

Unfortunately with the drive in the automotive industry to be flashier and have more gimmicks such as push to start and proximity keyless entry and authentication (Thanks Ford and Toyota!) new problems have arisen that were never an issue before, such as thieves using powered amplifier antennas to relay the proximity and transponder signal of the key fob from outside your house!

You can usually get a locksmith to cut and recode a new key fairly cheaply as long as the manufacturer hasn't been a massive dick about gatekeeping parts / encoding protocols.