Volkswagen is warning that the loss of chip supply from Nexperia could hit its production due to China’s export halt. The company relies heavily on semiconductors for critical systems like blinkers, windshield wipers, and warning lights. This disruption comes as European leaders discuss China’s increasing restrictions on materials needed for manufacturing.
The Dutch government recently took control of Nexperia, a Chinese-owned company based in the Netherlands. Beijing responded by halting exports of Nexperia’s chips, which are assembled in China. Volkswagen warned that supply-chain disruptions could affect production, citing the need to diversify automotive supply chains.
Several hundred chips are needed to make every car function, and European automakers are exploring options to avoid shortages. The German government has convened an emergency meeting with leading carmakers and suppliers to discuss strategies for further diversification.
Industry experts say substituting Nexperia chips is not expected to be straightforward or fast due to strict automotive safety standards. A worst-case scenario could lead to a 30% fall in German car production, while a more likely outcome is a 10% decline.
Source: https://www.nytimes.com/2025/10/23/business/volkswagen-chips-china-nexperia.html