Dispute over chip supplier Nexperia
The car industry warns Production stops
The Dutch chip manufacturer Nexperia has a prominent role in the trade conflict between China and the USA. The company is suffering from export restrictions – which could lead to production losses in the auto industry.
The auto industry is sounding the alarm about the threat of production losses due to delivery problems from the Dutch chip manufacturer Nexperia. After the European car association ACEA, the US car lobby also warned of disruptions to production. BMW is also preparing for problems due to the export restrictions imposed on Nexperia.
The company from the Netherlands belongs to the Chinese group Wingtech. With around 11,700 employees worldwide, it is the leading provider of simple semiconductors such as diodes and transistors. The largest factory is in Hamburg, and the company has 2,500 employees in Germany. The semiconductor manufacturer supplies supplies with its production there NDR-Information around ten percent of the global market.
“Domino effect on other industries” is feared
Nexperia informed car manufacturers and suppliers on October 10th that it could no longer guarantee its deliveries, said the ACEA association. Without the Dutch company’s chips, which are installed in electronic control units in vehicles, there was a risk of production stops. The stocks only lasted a few weeks. “We suddenly find ourselves in this alarming situation,” said ACEA Director General Sigrid de Vries. “We really need quick and pragmatic solutions from all countries involved.”
In the USA, the Alliance for Automotive Innovation, which represents General Motors, Toyota, Ford and Volkswagen, among others, pushed for a quick solution. “If shipments of auto chips are not resumed quickly, it will disrupt auto production in the United States and many other countries and have a domino effect on other industries,” said association head John Bozzella. According to some automakers, US plants could be affected as early as next month.
Under pressure in China and also in the USA
The background is the trade dispute between the USA and China, which led to export restrictions for Nexperia from both sides. The chips are delivered to China for packaging and further processing. However, the Chinese Ministry of Commerce banned the export of certain components with Nexperia chips at the beginning of October. According to Wingtech, this affects 80 percent of the end products. The move came in response to an expropriation of the chip manufacturer.
In the USA, the company is on a sanctions list of companies with which US companies are not allowed to do business because of alleged threats to national security. On Sunday, the Dutch government finally announced that it had taken control of Nexperia. Accordingly, there are deficiencies in company management that pose a “threat to the protection of important technological knowledge and skills on Dutch and European soil”. According to government information, the whole thing happened in September.
She justified this with concerns about technology being passed on to the Chinese parent company. According to court documents, the US government pressured the Netherlands to do so. The Chinese company boss was also removed by court order. Nexperia said on Tuesday it was facing export restrictions from both the US and China and was seeking discussions.
No failures so far
The car manufacturers themselves are also preparing for delivery problems. Parts of the supplier network are affected by the current developments at the Dutch company, said a BMW spokesman. However, production in the group’s factories is still proceeding according to plan. “We are in close contact with our suppliers and continually assess the situation in order to identify potential supply risks at an early stage and, if necessary, take appropriate measures.”
Mercedes-Benz said the company is monitoring the situation and is in contact with relevant parties. Volkswagen said Nexperia is not a direct supplier. But components were in components that VW receives from suppliers. “Our production is currently unaffected.” VW tries to identify risks in exchange with suppliers in order to react to them. Large suppliers such as Bosch, Aumovio and Valeo would also be affected by delivery failures.
ACEA also announced that there are alternative suppliers of the chips. But approval and setting up production are likely to take several months. The auto industry already experienced production downtimes during the corona pandemic because semiconductors from Asia were in short supply amid high demand from other industries. Export restrictions for rare earths from China are also hindering production.
