Chip shortage puts German carmakers in a tight spot

DW (English)

German car manufacturers are unable to get the chips they need since Dutch semiconductor supplier Nexperia has been unable to deliver its product. Volkswagen says it expects work stoppages if an alternative isn't found.

Transcript

00:00Nothing works in the automotive industry without semiconductors.

00:04They perform important functions in vehicle electronics

00:07and are critical for airbags, braking systems and other features.

00:11With a market share of 40%, Nexperia is the world's largest supplier of such semiconductors,

00:18but supply problems threaten its ability to deliver its products.

00:22Nexperia has been run by a Chinese parent company since 2018,

00:26but in September, the Dutch government took control, citing Dutch and European security interests.

00:33The problem for Nexperia, its semiconductors are heavily dependent on components from China,

00:38which they are now unable to access.

00:41This could have dramatic consequences for the automotive industry and not only in Germany.

00:46All the chips which are currently coming from Nexperia China

00:50are delivered to automotive Tier 1 suppliers who are using these chips,

00:56which are not high-tech chips, but just very normal chips.

01:00And they are delivering pretty much to all the European manufacturers.

01:03So everybody who's buying Nexperia chips is actually affected,

01:07and this seems to be pretty much all of the European manufacturers.

01:12For now, Volkswagen will be able to avoid halting its production.

01:16But the race for long-term solutions is on.

01:19The automaker is apparently in contact with several potential chip suppliers.

01:25It's high time, because switching to a new product will take time.

01:29So a car usually, or any type of vehicles, is for every part, which is built into this vehicle,

01:38will be type-approved, homologated.

01:41So if you change a part, not because it's a new generation,

01:44but really from the delivery side, the supplier side,

01:47you need to have it re-approved.

01:49And that takes weeks, months.

01:51For now, the auto industry hopes for a speedier process.

01:57The EU Commission has also involved itself trying to lower the temperature on trade with China,

02:03so that production stops across Europe can be avoided.

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