BEIJING — In a surprise move this weekend, China’s Ministry of Commerce announced that it would permit certain exports of chips from Nexperia — the Netherlands-based, Chinese-owned chipmaker at the heart of a supply-chain storm — to proceed under an exemption regime.

The company supplies widely used transistors and diodes that power modern vehicles. Prior to the reversal, China had suspended shipments in retaliation after the Dutch government seized control of Nexperia’s Dutch operations on national-security grounds.

In its statement, Beijing cited “the Dutch government’s improper intervention in the internal affairs of enterprises” as the trigger for the export freeze — and signalled that, as a “responsible major country,” it must “fully consider the security and stability of domestic and international supply chains.”

The Global Stakes, and Southeast Asia’s Role

When the export ban was first announced, global automakers sounded the alarm. According to reports, Nexperia’s chips accounted for about 40 % of the market for certain standard automotive semiconductors (such as diodes and transistors).

Europe’s auto industry body warned that assembly-line stoppages were only “days away.”
In Southeast Asia, two countries — Thailand and Malaysia — found themselves caught in the ripple effects.

• Thailand is actively building out its semiconductor ambitions, with a focus on advanced packaging and back-end chip manufacturing to complement its automotive ecosystem.
• Malaysia’s research houses warned of short-term risks to its semiconductor sector from renewed U.S.–China trade tensions and export-control uncertainties.

These developments underscore how supply-chain shocks in one region cascade through global networks.

Spotlight on Germany’s Auto Industry: Why Volkswagen Group Felt the Heat

Germany’s auto-manufacturing heartland has had front-row seats in the crisis. The country’s industry association Verband der Automobilindustrie (VDA) warned explicitly that the Nexperia dispute could lead to stoppages in German plants.

Volkswagen, Europe’s largest car-maker, acknowledged the issue. Although production remained secure for the coming week, it emphasised that the situation was fluid and short-term disruptions “cannot generally be ruled out.”

One German supplier, Robert Bosch GmbH, even prepared short-time-work options at a key plant in Salzgitter unless the dispute resolved.

For Volkswagen, the timing could not be worse. With major investments into electrification and digitalisation already under pressure, the chip-component squeeze adds another layer of risk to revenue, operations and employment.

What Happened — and Why It Matters

1. Trigger: On Sept 30, the Dutch government took operational control of Nexperia, citing concerns about technology transfer to China and national-security risk.
2. Retaliation: In early October, China suspended exports of certain Nexperia components, creating a bottleneck in standard semiconductors used by automakers.
3. Industry alarm: Given that modern cars may contain thousands of chips and that standard components are subject to strict certification, automakers warned that any prolonged shortage would force production line stoppages.
4. Softening: After senior­level talks between U.S. and China, Beijing said it would allow exemptions for eligible exports — thus averting the most immediate threat of shutdowns.

Regional Perspectives: Thailand and Malaysia

• In Thailand, authorities are leveraging the moment to accelerate semiconductor development — particularly for automotive and power-electronics segments, rather than advanced-node logic. The aim is to turn the country into a resilient regional node.
• Malaysia, meanwhile, is navigating supply-chain exposure while under increasing scrutiny from U.S. export-control authorities. Some analysts warn that disruptions abroad will spill into domestic trade and production outlooks.

While neither country is at the epicentre of the immediate crisis, both are illustrative of how Southeast Asia is increasingly entangled in systemic supply-chain shifts triggered by geopolitics.

What Comes Next?

• Alternative sourcing: German manufacturers and suppliers are scrambling to qualify alternative chip-makers, but certification and logistics mean this is not a quick fix.
• Diplomatic risk: The incident highlights how industrial production can be vulnerable to geopolitical manoeuvres, even when the components in question are relatively “mature” technologies.
• Resilience agenda: For the German auto sector — and others globally — the episode serves as a prompt to further diversify supply chains, localise critical component sourcing and build strategic stock-reserves.
• Watch-points: Though the immediate ban has been softened, questions remain about the finer details of the exemption process: how many components qualify, how quickly approvals will be granted, and whether the arrangement holds if relations sour again.

Mitigating Immediate Risk to Building Long-term Resilience

China’s step back from a full-blown chip export ban has relieved the most imminent threat to global auto manufacturing lines. Still, the disruption has laid bare the fragility of the “just-in-time” supply chains underpinning giants such as Volkswagen — and has focused attention on Southeast Asia’s emerging role in the semiconductor ecosystem. For German manufacturers especially, the challenge is shifting from mitigating immediate risk to building long-term resilience in a world where geopolitics and production are increasingly intertwined. (hb)

Photo: Volkswagen