Nexperia Crunch Sees Carmakers Asking for ‘China-Free’ Supplies

cross-posted from: https://scribe.disroot.org/post/5644525

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• European carmakers are looking into ways to reduce their dependency on components made with parts from China due to deepening geopolitical spats.
• Several automakers - in Europe as well as the U.S. - are pushing major suppliers to find permanent alternatives to Chinese semiconductors to protect operations from trade disruptions.
• The industry is considering broader changes to its supply chain to adapt to shifting geopolitics, with any meaningful recalibration of sourcing components outside China expected to take time.

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European carmakers are looking into ways to scratch components made with parts from China, spooked by deepening geopolitical spats playing out through chipmaker Nexperia and Beijing’s export controls on rare earths.

To protect operations from trade ructions, several automakers are pushing major suppliers to find permanent alternatives to Chinese semiconductors, people familiar with the matter said, declining to be named discussion private information. The industry is considering broader changes to its supply chain to adapt to shifting geopolitics, said Matthias Zink, the president of Europe’s main suppliers lobby CLEPA.

“We had some indications already — questions like, ‘how can you supply me without this dependency on China?’” Zink, who also heads Schaeffler AG’s powertrain & chassis division, said in an interview.

The moves follow last month’s sudden supply disruption at Chinese-owned Nexperia. The conflict escalated when Beijing blocked exports of key components from Nexperia’s Chinese factories, in response to the Netherlands seizing control of the company’s Dutch operations.

Similar activities can be seen in the U.S., where General Motors wants parts makers to pull supply chains from China. GM has directed several thousand of its suppliers to scrub their supply chains of parts from China, four people familiar with the matter said, reflecting automakers’ growing frustration over geopolitical disruptions to their operations.

GM approached some suppliers with the directive in late 2024, but the effort took on fresh urgency this past spring, during the early days of an escalating U.S.-China trade battle, the sources said. GM executives have said it is part of a broader strategy to improve the company’s supply chain “resiliency,” the sources said.

In a similar move, Tesla - which runs a plant in Shanghai - is now requiring its suppliers to exclude China-made components in the manufacturing of its cars in the United States.