A 36-day turmoil in the chip supply chain has exposed the vulnerability of the global automotive industry, which is highly dependent on specific suppliers, and has accelerated the process of self-sufficiency in the Chinese automotive industry chain.
“Production lines are intermittently operational, and we have even started discussing whether to adopt a four-day workweek.” At the end of October, a representative from Volkswagen’s Wolfsburg plant revealed to the media. Due to the interruption of chip supply from Nexperia, the world’s largest single automotive manufacturing plant faced a potential halving of its production capacity.
In mid-November, with the United States suspending the “50% penetration rule” and the Dutch government lifting restrictions on Nexperia, this supply chain crisis that has affected the global automotive industry seems to be coming to an end. However, the profound changes it has brought are just beginning.
The unbearable “chip” pain of the automotive industry
Nexperia plays an indispensable role in the global automotive supply chain. The automotive-grade MOSFETs and SiC devices it produces are core components of battery management, motor drive, and charging systems, directly determining how far electric vehicles can travel and how quickly they can charge.
The motor controllers of BMW and the battery management systems of Volkswagen are all reliant on Nexperia’s power chips. This explains why, after the supply interruption from Nexperia, the European Automobile Manufacturers Association, the Japan Automobile Manufacturers Association, and the American Automotive Innovation Alliance all issued warnings.
Automotive-grade chips are fundamentally different from consumer-grade chips. A head of R&D at a domestic automotive company pointed out: “Automobiles are related to life safety, and chips cannot be replaced arbitrarily. A car needs to provide a service life of 10 to 15 years, requiring long-term reliability.”
The qualification certification cycle for automotive-grade chips can take 6 to 12 months, and even if there are alternative products, they need to be re-validated and cannot be switched in the short term.
After Nexperia’s supply interruption, the prices of its products surged to 2-3 times their usual levels. The delivery time for popular models like the Volkswagen ID.3 extended from a few weeks to over three months.
Self-rescue of the automotive industry under geopolitical games
The Anshi incident began on September 29 when the United States announced the “50% penetration rule,” which extended the scope of the entity list control to subsidiaries with more than 50% ownership by sanctioned companies.
The next day, the Dutch government invoked the 1952 Materials Supply Act to take over Nexperia, suspending the position of Chinese CEO Zhang Xuezheng and placing the shares held by Wingtech Technology under third-party management.
In response to this situation, the Chinese Ministry of Commerce quickly took countermeasures, implementing export controls on Nexperia China. Nexperia China then announced independent operations, switching business transactions to RMB settlement and abandoning the SWIFT system in favor of the Chinese CIPS system.
Chinese automotive companies quickly initiated response mechanisms. A supply chain manager revealed: “We started responding two weeks ago, switching to domestic products is a medium to long-term plan, but currently, we are prioritizing emergency stockpiling.”
Domestic power semiconductor companies such as BYD, Silan Microelectronics, and Star Semiconductor are seizing development opportunities.
European automotive companies are seeking political solutions. German automotive parts giants such as ZF and ElringKlinger are urgently seeking exemptions from China’s export restrictions on Nexperia chips. The European Commission has also urged the Netherlands to “resolve the issue as soon as possible and not to drag down the entire EU.”
Accelerating the reshaping of the automotive supply chain
At the beginning of November, the situation took a turn. The U.S. Department of Commerce announced a one-year suspension of the “50% penetration rule,” and the Chinese Ministry of Commerce also stated that it would grant exemptions for eligible exports. On November 12, the Dutch government announced the termination of all restrictions on Nexperia.
Although this turmoil has calmed down, its impact on the automotive industry is profound. The European Automobile Manufacturers Association estimates that the chip shortage has caused direct and indirect economic losses of nearly 10 billion euros.
The Nexperia incident has pushed the automotive supply chain towards diversification and regionalization. Companies like Volkswagen and BMW are beginning to consider shifting some long-term orders to more stable and cost-effective Chinese suppliers. Support for domestic companies like BYD Semiconductor and Silan Microelectronics is also increasing.
European automotive manufacturers are reassessing supply chain risks, with companies like Volkswagen and BMW starting to shift some long-term orders to more stable and cost-effective Chinese suppliers.
At the Guangzhou Auto Show in late November, competition in intelligence has reached a fever pitch. Huawei’s intelligent automotive solution ecosystem has expanded to 33 mass-produced models from 14 automotive companies; brands like BYD and Xiaomi showcased their latest breakthroughs in intelligent assisted driving.
“By 2030, China’s automotive semiconductor market is expected to account for 65% of the global market,”said Li Jianqiu, a professor at Tsinghua University’s School of Vehicle and Mobility. “Whoever establishes a foothold in China will have a strong position in the global automotive semiconductor market.”
Suspension of the Jinggang’ao Military Mountain Toll Station, Dongfeng parts factory established
