European carmakers fear for production in dispute over chipmaker Nexperia
Written by: Rachel More
BERLIN (Reuters) – European automakers could face significant production cuts unless there is a quick resolution to a trade and intellectual property dispute between China and the Dutch government over chip maker Nexperia, an industry association warned on Thursday.
The dispute could put further pressure on Europe’s auto sector, where automakers and suppliers are already struggling with tariffs, foreign competition and weak demand.
This also pushes Nexperia into a trade war between the world’s two largest economies; US President Donald Trump is increasing pressure on the technology as he restricts China’s rare earth exports.
A LOOK AT ITS CHINESE OWNER WINGTECH
ACEA, the European Union’s automotive association, said it was “deeply concerned about possible serious disruptions to European vehicle production if the disruption in Nexperia chip supplies is not resolved immediately.”
ACEA said in a statement that automakers and their suppliers received notification from Nexperia last week that it could no longer guarantee delivery of its chips.
“Without these chips, European automotive suppliers would not be able to produce the parts and components needed to supply vehicle manufacturers, thus risking production shutdowns,” the statement said.
A Nexperia spokesperson said: “We hope that all difficulties will be resolved soon for the benefit of everyone.” he said.
He said he could not comment beyond a statement the company issued on Tuesday saying it was in talks with Chinese authorities to obtain exemptions from the restrictions.
The Dutch government announced on Sunday that it had taken control of Chinese-owned computer chip maker Nexperia as of September 30, citing concerns about the possible transfer of technology to Nexperia’s Chinese parent company Wingtech.
Court documents show that the Dutch government’s move follows months of increasing US pressure on the company. Nexperia was at risk of being affected by a new US rule that expands export control restrictions to companies that are at least 50% owned by one or more entities on the US entity list.
Washington placed Wingtech, which has 100% ownership of Nexperia, on the US list in late December.
China’s commerce ministry issued an export control notice on Oct. 4 banning Nexperia China and its subcontractors from exporting certain finished components and subassemblies manufactured in China, according to a statement Nexperia released Tuesday.
Nexperia chips are not technically advanced but are needed in large quantities. Its largest manufacturing facility is in Hamburg, Germany, but most of its chips are packaged and assembled into larger products in China.
AUTOMOBILE MANUFACTURERS AND SUPPLIERS ARE WORKING TO IDENTIFY RISKS
Volkswagen and BMW are among the automakers whose supplier networks include Nexperia, while Bosch is among the German auto suppliers using its chips.
Volkswagen and BMW said production was not yet affected by the problems, but they were working to identify potential supply risks.
“We are monitoring the current situation closely and are also in contact with the manufacturer Nexperia, one of our suppliers of electronic components,” a Bosch spokesman said.
Mercedes-Benz said it was monitoring the situation and in contact with relevant stakeholders, without providing further details. A spokesman declined to say whether Nexperia was part of the company’s supplier network.
“Stellantis is monitoring the situation closely and collaborating with Nexperia and other suppliers to assess potential impacts and develop mitigation measures,” a spokesperson for the automaker said.
Responding to a question about Nexperia on Thursday, China’s Ministry of Commerce said that it opposes administrative interference in the internal affairs of enterprises and will take necessary measures to protect the legal rights and interests of Chinese enterprises.
(Additional reporting by Toby Sterling in Amsterdam, Che Pan in Beijing and Brenda Goh in Shanghai; Editing by Matthias Williams, Mark Potter and Ed Osmond)
