China-Dutch conflicts spark chip shortage for automotive manufacturers

Dutch delegates will travel to Beijing next week in an effort to curb Nexperia issues. The Dutch Ministry of Economic Affairs is sending the delegation to China in response to a request from the Chinese government for Dutch cooperation in resolving the issues.

A delegation from the Dutch government is set to travel to China in response to the emerging crisis around Chinese chip-maker Nexperia. 

Dutch Economy Minister Vincent Karremans confirmed on Thursday that the delegation will travel to Beijing next week in an effort to continue discussions on finding a mutual agreement between the two countries to solve the issues facing the chipmaker.

China-Dutch conflicts spark chip shortage for automotive manufacturers

The delegation dispatch follows a Chinese request that urged the Dutch government to demonstrate cooperation with the Asian government in advancing permanent solutions for the Chinese company based in the Netherlands.

Karremans noted that he was open to China’s imminent moves to loosen regulations around the export of Nexperia’s chips. He also added that he was closely monitoring the situation to confirm when trade from Nexperia’s facilities in China would resume.

In late September, Nexperia found itself sandwiched in a geopolitical war between the Chinese and the Dutch governments. Netherlands authorities seized control of the chipmaker from its Chinese parent company, Wingtech Technology, after concerns arose over the company’s technology transfers to China.

The European government also removed its Chinese CEO after U.S. officials cautioned European allies about existing security threats accompanying Chinese leadership in key tech sectors.

In response, the Chinese government implemented export controls on Nexperia’s products manufactured in China, which had a devastating impact on the automotive and electronic supply chains.

A letter distributed by Nexperia to its clientele on October 29th detailed that the company had suspended supplies of wafers to its Chinese assembly plant, causing a supply squeeze to automotive manufacturers. The letter informed that the suspension was a direct consequence of the Dutch’s previous actions, which failed to honor existing contractual agreements.

Cryptopolitan previously reported that the China-Dutch clash over the chip maker forced European carmakers against the wall and put the continent’s car production at risk. According to the report, the European Automobile Manufacturers’ Association (ACEA) has warned that parts of Europe’s car production may collapse if deliveries of the Nexperia chip are halted. 

Automotive manufacturers suffer amid the Nexperia chip disruption

Volkswagen was among the first automotive companies to face the chip shortage challenge after the China-Dutch fallout. On October 22nd, the car manufacturer announced shortly after the Nexperia dispute erupted that it had halted the production of iconic models.

The company later resumed production after announcing that chip production had resumed, but cautioned about uncertainty ahead.

BMW noted that its supply network felt the impact of the trade war and had initiated talks with relevant stakeholders to ensure the stability of its supply chain.

Europe’s major automotive parts supplier, Bosch, also commented on the issue, cautioning that even minor disruptions could still send considerable shockwaves through the supply chain. Earlier reports noted that the Netherlands had agreed to relinquish control over Nexperia on the condition that China resume chip exports and resolve internal issues. 

Nexperia chips are vital components that make up rudimentary automotive systems, such as sensors, controls, and battery management. Without these systems, modern car manufacturers face serious production challenges.

As the two nations near a mutual agreement halfway around the world, General Motors has informed its suppliers that it is no longer willing to depend on China for supplies.

A recent Cryptopolitan report noted that the automotive giant cited the China-US trade relationship as having become random and unpredictable. The report highlighted that the company gave some suppliers up to 2027 to disentangle from Chinese control. The company expressed its frustrations after Trump’s new tariffs rekindled the China-U.S. trade war.

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