Post by : Badri Ariffin

Germany’s automotive powerhouse, Volkswagen, has sounded an alert over possible production interruptions due to China’s export restrictions on semiconductors from Nexperia. The disruption comes amid rising tensions after the Dutch government took control of the Chinese-owned chipmaker last month.

While Nexperia does not supply Volkswagen directly, its chips are embedded in components provided by Volkswagen’s suppliers. The automaker emphasized that production is currently running smoothly, but acknowledged that short-term interruptions cannot be ruled out if the supply chain remains constrained.

The Dutch government’s unprecedented move to seize Nexperia was driven by concerns that the company’s technology might become inaccessible during a crisis. In retaliation, China blocked exports of Nexperia’s finished chips, triggering alarm across Europe’s automotive industry, which heavily depends on these high-volume semiconductor components.

The German car lobby, VDA, warned that if the supply interruption persists, “significant production restrictions” could hit soon. Volkswagen continues to monitor the situation closely, coordinating with all relevant suppliers to mitigate any potential fallout.

Investors reacted swiftly, with Volkswagen shares falling 2.2% during early London trading. The incident underscores how geopolitical moves can ripple through global supply chains, putting even established automakers at risk of production slowdowns.

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