The Chip Crisis That Could Shut Down Europe’s Auto Plants in weeks

Welcome to Issue #91 of The German Autopreneur.

German automakers have 2 to 6 weeks of chips left. Then supplies run out. Then production stops.

The German Automotive Association (VDA) is warning about shutdowns. Not someday. Now. Within weeks.

The reason? A Dutch chipmaker named Nexperia.

But Nexperia is just a symptom. The real problem? Europe trapped between two superpowers.

The US and China are fighting for global dominance. And Europe? Caught in the middle. Dependent on both. Pressured by both.

Today we'll look at how this situation happened. And what it means for the automotive industry.

Why One Company Can Stop European Auto Production

Nexperia is a Dutch chipmaker. Not many know the name. But they’re absolutely essential.

They produce simple semiconductors:

• Transistors and diodes

• For airbags, LED controls, sensors

• Hundreds in every car

The numbers tell the story:

Nexperia controls 40% of the global market for these chips. And 55% of their revenue comes from automotive.

Technically, the chips are simple. But without them, nothing works.

How the Crisis Escalated

The real problem isn't Nexperia itself. It's the Chinese parent company Wingtech. And Washington’s determination to cut that link.

Here's what happened:

December 2024: The US puts Wingtech on its sanctions list. The reason? National security. Washington claims sensitive semiconductor technology could flow to China.

September 2025: The US delivers an ultimatum to the Netherlands. Remove Nexperia's CEO or face sanctions.

The target: Zhang Xuezheng. Founder of Wingtech. CEO of Nexperia. Washington sees this dual role as a security threat.

If he stays, Nexperia faces sanctions. Game over.

September 30: The Dutch government takes control of Nexperia. Zhang is removed by court order. Official reason: "Governance failures" and "improper transfer of resources to foreign entities.”

This is a huge step. A government removes the CEO of a private company. Under pressure from another country.

October 4: China retaliates. Beijing blocks all Nexperia exports from China. Immediate. Calculated. Devastating.

The impact? Without these chips, car production stops. Every vehicle needs hundreds of them. And alternatives take months to certify.

Here's the irony: These chips are designed in the Netherlands. Manufactured in Hamburg. Then they travel to China for testing and packaging. 80% return to Europe as finished products.

This is modern supply chain optimization. Maximum efficiency. But also extremely vulnerable.

And now this chain is broken.

The Auto Industry in Panic Mode

The consequences:

• VW has set up a task force. Already considering short-time work for tens of thousands of employees

• BMW and Mercedes are making emergency plans with suppliers

• Bosch is also affected

The VDA released strong numbers:

• In 3 to 5 days, 4 out of 7 major suppliers face delivery problems

• In 5 to 10 days, 5 out of 6 automakers can't fulfill customer orders

Stockpiles are running low. An insider says: "We're talking about hours or days at most."

Yes, other suppliers exist. Infineon. STMicroelectronics. But ramping up takes time. And every new component needs certification. Months of testing. Months automakers don't have.

Europe Trapped Between Superpowers

The Nexperia crisis exposes Europe's impossible position. Trapped between the US and China.

This goes way beyond automotive. This is about the new world order.

China keeps getting stronger. The US wants to stop that. By any means necessary.

Meanwhile, American dominance is slipping. Every space the US leaves, China fills.

And they're fighting this war with economic weapons. Technology restrictions. Export controls. Resources. Trade barriers.

The US moved first. Restricted chip exports to China. China hit back with rare earth controls.

Every time they fight, Europe bleeds.

Europe's Impossible Choice

Europe has three options. None of them are good.

Option 1: Side with the US

Align with America. Accept their technology restrictions. Follow their lead on China.

The problem? Trump's America doesn't treat Europe like an ally anymore. It treats Europe like a competitor.

High tariffs on European goods. Demands for military spending. Policy that changes by the day.

Meanwhile, Europe depends on China economically. China is Germany's largest trading partner. Bigger than the US.

Side with America? China retaliates. Rare earths. Critical minerals. Chips. Any leverage they have.

Option 2: Side with China

Welcome Chinese investment. Deepen economic ties. Ignore US objections.

This isn't an option either.

Europe relies on the US just as much. For defense. For technology. For AI. For energy since Russian gas stopped.

Option 3: Stay Neutral

Most emerging markets follow this playbook. Keep both sides happy. Trade with both. Commit to neither.

For Europe, this is the only reasonable path. Pick a side and you pick a fight. Stay neutral and you might survive.

But neutrality isn't easy. It requires constant balancing. Give a little here. Take a little there. Never fully commit to either side.

What Europe Must Do Now

The solutions break down into 3 steps:

Short-term: De-escalation

The Dutch and Chinese economic ministers are talking. No breakthrough yet. Germany is coordinating with automakers. The goal: A diplomatic solution. And fast.

Medium-term: Diversify Supply Chains

The lesson: Reduce risk without cutting ties. Europe can't abandon China. But it can't depend on China for everything either.

That means spreading production across regions. Alternative suppliers. Backup manufacturing sites. Redundancy for critical steps.

Yes, it costs more. But the alternative costs everything.

Long-term: Build Independence

Europe needs its own supply of critical materials. Batteries. Chips. Rare earths. Defense equipment. Energy.

But this doesn't happen overnight. We're talking decades.

My Take

The Nexperia crisis isn't about automotive. It isn't about Europe. But European automakers are paying the price anyway.

Imagine China doing this in reverse. Removing a Dutch CEO in Shanghai. Seizing company control. Under pressure from Beijing.

Unthinkable? That's exactly what just happened. Just with the US doing it.

This is war. Not with tanks. With technology. With semiconductors. With resources. With economic leverage.

Another warning. In a long series Europe keeps ignoring.

The only option is the hard middle path. The path emerging markets navigate every day. To keep the balance. To stay neutral.

And at the same time: Build Independence.

The alternative? More of this. More crises. More collateral damage. Every time the giants fight, Europe bleeds.

🔗 ap1 | ap2 | au1 | au2 | ca1 | ca2 | el1 | fa1 | ft1 | hb1 | hb2 | hb3 | hb4 | he1 | he2 | ma1 | ni1 | ni2 | nyt1 | re1 | re2 | re3 | re4 | re5 | re6 | wi1 | wi2 | wi3

That's all for today.

Feel free to reply to this email with your thoughts.

Until next week,
— Philipp

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