China has imposed export licensing controls on some chips and components from Nexperia of the Netherlands, affecting the German automotive supply chain. German media pointed out that each car manufactured by European automakers contains an average o...
China has imposed export licensing controls on some chips and components from Nexperia of the Netherlands, affecting the German automotive supply chain. German media pointed out that each car manufactured by European automakers contains an average of about 600 chips produced by Nexperia. If export restrictions continue, automakers may face a new wave of chip shortages after the epidemic.
Nexperia was originally a division of NXP Semiconductors, which was spun off from Philips. It operated independently in 2017 and was acquired by China Wingtech Technology for US$3.6 billion (approximately NT$111.5 billion) in 2019.
The company produces a large number of low-price bulk chips, such as transistors and diodes, which are used in consumer electronics and automotive electronic systems. Due to the large number of products and low unit price, it is commonly known as "chicken feed chip" in the German industry.
As the technological rivalry between the United States and China intensifies, Europe has become increasingly wary of Chinese-controlled semiconductor manufacturers. At the end of September, the Dutch government used the Goods Availability Act established during the Cold War for the first time to take over the European business of Nexperia and fired Chinese CEO Zhang Xuezheng from his position on the grounds of preventing technology outflow.
In response, China’s Ministry of Commerce announced that the export of some standard chips and components produced by Nexperia’s Chinese factories must apply for permission in advance. Since Nexperia accounts for about 40% of the global standard discrete semiconductor market, export controls have quickly impacted the German automotive industry.
According to the German industrial media Handelsblatt, major automakers such as BMW, Mercedes-Benz and Volkswagen can still rely on inventory to maintain production for the time being. However, due to the uncertainty of the situation, automakers must track supply status on a daily basis.
BMW Chief Purchasing Officer Nicolai Martin said frankly, "This matter bothers us every day." The company has activated a task force, is also purchasing chips through the spot market, and is actively looking for alternative suppliers.
A spokesman for Volkswagen said that the company can ensure the supply of chips for at least next week, but the situation is still changing dynamically and it cannot rule out an impact on production in the short term.
Joerg Burzer, head of production and supply chain management at Mercedes-Benz, pointed out that the problem this time is different from previous chip crises. It is not a lack of production capacity, but supply interruptions caused by political factors. He said that although companies can try to diversify suppliers, they cannot eliminate risks 100%. "With just two small chips, we cannot assemble the entire car."
German media warned that if China’s export controls continue, European automakers may fall into a new wave of chip shortages after the epidemic.
Der Spiegel reported under the title "Nexperia could paralyze half of the German economy" and pointed out that the German automobile industry has long ignored the vulnerability of the small parts supply chain.
Report analysis shows that although the chip shortage crisis during the epidemic has prompted the industry to re-examine supply chain dependence, each European-made car still contains an average of about 600 microchips produced by Nexperia.
Although these "chicken feed chips" have low unit prices and wide applications, they are indispensable core components of automotive electronic systems. Precisely because of the low prices and wide variety of products, it is not economically feasible to establish dual supply chains to spread risks, making it more difficult for car manufacturers to get rid of their dependence on Chinese supplies.
After the Trump-Xi meeting, the Chinese Ministry of Commerce announced that Nexperia customers affected by supply disruptions can apply for export licenses to obtain the chips they need, giving German automakers a temporary sigh of relief. However, whether this new system can operate smoothly is still a question mark.
Hildegard Müller, chairman of the German Automobile Manufacturers Association (VDA), said that there are still many key issues such as "when will the new regulations take effect?" that have not yet been clarified, and it is uncertain whether German automakers can successfully lift the chip shortage alert in the near future.
Further reading: Affected by Anshi and semiconductor shortage, Nissan cuts production at two Japanese factories Confrontation between China and the Netherlands, shortage of semiconductors, Honda’s Mexico plant suspends production The deadlock between China and the Netherlands continues! Anshifa force majeure notice: China shipment schedule and quality cannot be guaranteed Nexperia deadlock, major German auto parts manufacturers rush to obtain China export exemption Details of Sichuan-Xi meeting agreement made public! China suspends rare earth controls, releases Nexperia, and US delays tariffs It’s time for European semiconductors to wake up! Nexperia's crisis triggers supply chain restructuring, benefiting Taiwan's mature manufacturing processes The battle for Nexperia’s dominance raises concerns over the outflow of key semiconductor technologies to China
