Volkswagen has expresed concerns that the Nexperia issues between China and Amsterdam will affect its production.
German auto giant Volkswagen (VW) has issued a warning of potential temporary production outages, citing China’s retaliatory export restrictions on semiconductors manufactured by Nexperia. This escalating geopolitical dispute, which has already caused VW’s shares to trade lower, now poses a direct threat to Europe’s largest automaker.
The Nexperia Supply Chain Crisis
The current supply chain crisis was triggered when the Dutch government took the highly unusual step of seizing control of Netherlands-based, Chinese-owned chipmaker Nexperia last month. The move was justified by fears that the firm’s critical technology “would become unavailable in an emergency” and due to “serious governance shortcomings” linked to its Chinese ownership.
China swiftly responded by blocking the export of Nexperia’s finished products from its Chinese plants. Nexperia specializes in the high-volume production of basic chips used across various industries, making its components foundational to modern vehicle electronics.
Impact on Volkswagen and German Auto Industry
Although Volkswagen clarified that Nexperia is not a direct supplier, a spokesperson confirmed that some Nexperia parts are embedded in vehicle components supplied by its direct vendors, thus exposing VW’s production chain indirectly to the disruption.
While VW’s production is currently unaffected, the spokesperson acknowledged the risk, stating, “However, given the evolving circumstances, short-term effects on production cannot be ruled out”.
The German Association of the Automotive Industry (VDA) amplified the concern, warning that the China-Netherlands dispute over Nexperia could lead to “significant production restrictions in the near future” or even production stoppages if the chip supply interruption is not swiftly resolved. Germany’s Economy Ministry has also voiced its concern about the resulting difficulties in the chip supply chain.
Volkswagen has confirmed it is “in close contact with all relevant stakeholders” to mitigate potential risks at an early stage. The situation underscores the extreme vulnerability of the automotive sector to geopolitical tensions, especially concerning essential semiconductor components.
