By Raquel More
BERLIN (Reuters) – European carmakers could face major manufacturing disruptions without a quick resolution to a trade and intellectual property dispute over chipmaker Nexperia between China and the Dutch government, an industry association warned on Thursday.
The dispute could cause further strain on Europe’s auto sector, whose manufacturers and suppliers are already struggling with tariffs, foreign competition and weak demand.
It also pushes Nexperia into a trade war between the world’s two largest economies, with US President Donald Trump increasing pressure on the technology while China curbs rare earth exports.
FOCUS ON CHINESE OWNER WINGTECH
ACEA, the European Union’s automobile association, said it was “deeply concerned about a potential significant disruption to European vehicle manufacturing if the disruption to the supply of Nexperia chips cannot be resolved immediately.”
Automakers and their suppliers received notification last week from Nexperia that it could no longer guarantee delivery of its chips, ACEA said in a statement.
“Without these chips, European automotive suppliers cannot manufacture the parts and components necessary to supply vehicle manufacturers and this therefore threatens production disruptions,” the statement said.
“We hope all challenges are resolved soon in everyone’s best interest,” a Nexperia spokesperson said.
He said the company could not comment further beyond a statement on Tuesday that said it was working with Chinese authorities to obtain an exemption from the restrictions.
The Dutch government announced on Sunday that, as of September 30, it had taken control of Chinese-owned computer chip maker Nexperia, citing concerns about possible technology transfer to Nexperia’s Chinese parent company, Wingtech.
Court documents showed that the Dutch government’s move came after months of increasing American pressure on the company. Nexperia was at risk of being affected by a new US rule that extends export control restrictions to companies that are at least 50% owned by one or more entities on the US entity list.
Washington put Wingtech, which owns 100% of Nexperia, on the US list in late December.
The Chinese Ministry of Commerce issued an export control notice on Oct. 4 prohibiting Nexperia China and its subcontractors from exporting specific finished components and subassemblies made in China, according to a statement Nexperia released Tuesday.
Nexperia chips are not technically sophisticated but are needed in large volumes. Its largest manufacturing site is in Hamburg, Germany, but most of its chips are packaged and assembled into larger products in China.
AUTOMOBILE MANUFACTURERS AND SUPPLIERS WORK TO IDENTIFY RISKS
Volkswagen and BMW are among the automakers whose supplier networks include Nexperia, and Bosch is among the German auto suppliers that use its chips.
Volkswagen and BMW said production had not yet been affected by the problems, but they were working to identify potential supply risks.
“We are closely monitoring the current situation and are also in contact with the manufacturer Nexperia, which is one of our electronic component suppliers,” a Bosch spokesperson said.
Mercedes-Benz said it was monitoring the situation and liaising with relevant stakeholders, without giving further details. A spokesperson declined to say whether Nexperia was part of the company’s supplier network.
“Stellantis is closely monitoring the situation and collaborating with Nexperia and other suppliers to assess potential impacts and develop mitigation measures,” a spokesperson for the automaker said.
China’s Ministry of Commerce, responding to a question about Nexperia, said on Thursday that it opposed interference in the internal affairs of companies through administrative means and would take necessary measures to safeguard the legitimate rights and interests of Chinese companies.
(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)