Who are the key players and why is this relevant?
German automobile manufacturers, including BMW, Mercedes Benz, and Volkswagen, are highly susceptible to disruptions in chip supplies from Nexperia. According to S&P Global Mobility consultancy, Nexperia accounts for roughly 5% of the global market for discrete silicon automotive chips, with a slightly higher share in Europe.
Impact on Upcoming Launches
These German Original Equipment Manufacturers (OEMs) are particularly concerned about several significant launches planned for late 2025 and early 2026, including BMW’s Neue Klasse platform, Mercedes-Benz’s next-generation CLA, and Volkswagen’s fully electric T-Cross. A shortage of Nexperia chips could significantly disrupt these launch timelines.
Nexperia’s Market Position and Alternatives
Nexperia primarily sells standard components rather than specialized integrated circuits or microcontrollers for specific applications. Therefore, alternatives are readily available from Infineon, ON Semiconductor, ROHM, Renesas, or STMicroelectronics.
While replacing individual devices might be straightforward, re-qualifying parts, coordinating purchases, and verifying functional safety at scale pose operational challenges in the short term.
Analysis by Rohan Hazarika
Rohan Hazarika, the author of the analysis titled “The Dutch Acquisition of Nexperia Raises Concerns Over Chip Supply,” explains that the Dutch government’s acquisition of Nexperia introduces new risks in the automotive chip supply chain and exacerbates global tensions in the semiconductor sector.
Global Implications for the Automotive Industry
In Mexico, automakers like Volkswagen and Honda have already faced technical stoppages due to chip shortages. Although it may seem like an isolated issue, the automotive industry is globally interconnected.
Nexperia’s components are essential for various vehicle units, from body electronics and lighting to airbag systems and motor control units. The current Nexperia situation highlights how geopolitical tensions, such as those between the Netherlands and China, can destabilize automobile manufacturers.
Short-term Mitigation and Long-term Risks
S&P notes that current inventories of standard silicon components should provide a short-term cushion as first-tier suppliers and Original Equipment Manufacturers (OEMs) transition to alternative providers.
However, risks remain due to Nexperia’s significant manufacturing and testing capacity concentration in mainland China, which accounts for about 80% of its total capacity. Additionally, export control pressures from the US and China further increase uncertainty around future supply.
Key Questions and Answers
- Who are the key players affected by this chip shortage? German automakers like BMW, Mercedes Benz, and Volkswagen are highly vulnerable to disruptions in Nexperia chip supplies.
- What percentage of the global discrete silicon automotive chip market does Nexperia represent? Nexperia accounts for approximately 5% of the global market, with a slightly higher share in Europe.
- What are the upcoming launches at risk due to this shortage? Significant launches planned for late 2025 and early 2026, including BMW’s Neue Klasse platform, Mercedes-Benz’s next-generation CLA, and Volkswagen’s fully electric T-Cross, could be affected.
- What alternatives are available for Nexperia components? Alternatives are readily available from Infineon, ON Semiconductor, ROHM, Renesas, or STMicroelectronics.
- What are the short-term and long-term risks associated with this situation? Short-term risks include operational challenges in re-qualifying parts and verifying functional safety at scale. Long-term risks stem from Nexperia’s significant manufacturing capacity concentration in mainland China and export control pressures from the US and China.
