“The current chip crisis shows how fragile our world really is. Unlike the last semiconductor shortage, this one concerns very basic chips used across multiple industries, especially in cars,” said Volkswagen CEO Oliver Blume.
Blume admitted that manufacturers have only managed to secure short-term supplies. – “In the short term, the Volkswagen Group is covered, but we need a quick political solution,” he stressed.
The crisis stems from growing tensions between China, the Netherlands, and the United States. Beijing imposed an export ban on Nexperia products—Nexperia being a Dutch company owned by the Chinese group Wingtech—in response to actions by the Dutch government.
On October 12, the outgoing Dutch government, citing the Trade and Industry Act, took control of the company. It justified the move over concerns that critical semiconductor technologies could be transferred to China. The Ministry of Economic Affairs limited Nexperia’s board powers, retaining the right to block decisions that might threaten the continuity of chip supplies.
Wingtech strongly criticized the intervention, calling it a “coup against the board” and accusing the Netherlands of political motives disguised as “national security.” In an October 12 statement, the Chinese company argued that The Hague’s actions violate EU market principles, fair competition, and international trade norms, while discriminating against Chinese-owned firms.
Semiconductors have never been more crucial to the automotive industry. Modern combustion-engine cars contain around 8,000 chips, while electric vehicles may have up to 18,000. Experts warn that any component shortage could halt entire production lines.
Unlike consumer electronics, carmakers operate on a just-in-time model, where substitute component certification is long and costly. This system minimizes stockpiles but makes the industry highly vulnerable to disruptions.
The situation is worsened by rising chip demand from other sectors, especially data centers and AI companies. Suppliers are prioritizing more advanced chips, limiting the availability of automotive-grade components. Investments in new production capacity are slow, and high costs plus long ramp-up times increase supply tensions.
Since last year, major carmakers—including Volkswagen, Mercedes-Benz, and Nissan—have been building inventories of critical components and establishing dedicated teams to monitor risks and diversify suppliers.
– “Despite efforts by carmakers to diversify suppliers, risks cannot be completely eliminated. The current situation is concerning and requires pragmatic, multi-faceted action,” warned Sigrid de Vries, Director General of the European Automobile Manufacturers’ Association (ACEA).
The industry is calling for more transparency with suppliers and greater collaboration to better anticipate shortages. European manufacturers are introducing a new procurement model aimed at increasing visibility, reducing complexity, and strengthening partnerships for joint chip sourcing.
Analysts estimate semiconductor challenges could persist or even worsen next year if coordinated investment and policy measures are not taken.
Nexperia’s chip supplies could run out in weeks, potentially costing manufacturers billions in lost revenue and delaying new model launches. Supply disruptions also threaten to slow the automotive transition toward electrification and digitalization.
Semiconductor supply has become a strategic priority, linking economic security with Europe’s technological competitiveness. This is yet another warning sign, following previous trade tensions with the U.S. and China, highlighting the risks of dependence on a narrow group of suppliers and the powerful role geopolitics plays in industrial security.
Do you have anything to add to this story? Any ideas for interviews or angles we should explore? Let us know if you’d like to write a follow-up, a counterpoint, or share a similar story.
