Europe’s auto sector is once again navigating choppy waters as China’s recent export ban on semiconductor products from Nexperia sends ripples across the industry. This decision, directly targeting the Dutch semiconductor firm owned by China’s Wingtech, has ozbiljno disrupted supply lines for critical automotive chips essential for major players like Volkswagen, Audi, and Porsche.
Volkswagen Group CEO Oliver Blume confirmed that the automaker has secured sufficient chip supplies for the time being, but he remains cautious, frequently monitoring the rapid developments surrounding chip availability. The restrictions came into effect following the Netherlands’ seizure of Nexperia, citing national security as the primary concern, complicating an already tense situation as automakers grapple with post-pandemic recovery from prior supply shortages.
Blume, who also serves as the head of Porsche, referred to the circumstances as symptomatic of a “massive crisis,” exacerbated by falling sales in China and increasing U.S. tariffs impacting European vehicles.
Porsche’s Financial Struggles Deepen Amid Semiconductor Shortage
The ongoing semiconductor crunch serves as a significant contributor to Porsche’s financial troubles, with the luxury carmaker reporting a staggering €1 billion (approximately US$1.2 billion) loss in operating income during the third quarter. This financial downturn is largely attributable to dwindling demand from China alongside rising component costs.
Earlier this month, Porsche announced that Blume would be stepping down as CEO in 2026, with Michael Leiters, former McLaren Automotive chief, set to take the helm. This leadership transition highlights a need for strategic adaptation as Porsche confronts an array of challenges, including market volatility, the push towards electrification, and the ongoing semiconductor supply crisis.
Simultaneously, the export ban imposes additional strain on a European automotive industry already dealing with U.S. tariffs and China’s restrictions on rare earth materials crucial for electric vehicle (EV) batteries and other components.
Disrupted Supply Chains: The Impact of the Export Ban
China’s latest export controls specifically target “finished components and sub-assemblies manufactured in China,” effectively cutting off approximately 70% of Nexperia’s total output directed towards international markets. The Guangdong manufacturing site spanning 80,000 square meters is among those affected.
While Nexperia’s facilities in Germany and the U.K. are still operational, the loss of production in China has led to a notable increase in lead times, extending by 6 to 8 weeks and triggering price hikes of between 5% and 20% across critical semiconductor categories. Automotive-qualified discrete components such as the BAT54S and BAT46WJ diodes—vital for modern vehicle power management and safety systems—are some of the most affected components.
Industry insiders emphasize the complexity involved in substituting these parts, given the rigorous AEC-Q101 certification standards that automotive components must meet. This complexity impedes alternative sourcing and reduces manufacturers’ flexibility.
Europe’s Search for Alternatives Amidst Rising Costs
In an attempt to alleviate the impact, distributors and Tier 1 suppliers are racing to secure compatible components from alternative manufacturers such as Onsemi, STMicroelectronics, Diodes Incorporated, Vishay, and Infineon. However, many of these replacements come at a higher cost and necessitate requalification for use in production lines.
Some European automakers are proactively stockpiling semiconductor inventories to guard against potential shortages anticipated in early 2026, as analysts forecast further instability should trade tensions escalate. Nexperia’s cross-reference tool, aimed at helping clients identify equivalent chips, can quickly match up to 50 part numbers simultaneously. Still, it does little to mitigate the impact of sudden global scarcity and the accompanying urgency premiums.
As lead times lengthen and costs spiral upwards, Europe’s automotive industry braces for another round of production slowdowns and the inevitable compression of profit margins. This semiconductor bottleneck starkly highlights the continent’s reliance on external chip supplies, an issue that Europe’s ongoing “Chips Act” aims to address by fostering local semiconductor production.
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