Volkswagen AG’s recent production halt at its Wolfsburg plant has become a symbol of how technological dependencies can turn into strategic vulnerabilities. The issue is not steel, labor, or consumer demand — it is semiconductors.
The immediate trigger: Nexperia and the Dutch intervention
Nexperia NV, a Dutch semiconductor manufacturer owned by Chinese investors, has been placed under temporary state supervision by the Dutch Ministry of Economic Affairs and Climate Policy due to “serious governance deficiencies” and concerns over critical technologies (see our previous post).
In response, Beijing reportedly restricted the export of Nexperia’s components to Europe, citing “unjustified geopolitical interference.”
Although Volkswagen insists that Nexperia is not a direct supplier, the company has acknowledged that “some Tier-1 suppliers rely on Nexperia chips,” making production risks impossible to rule out in the short term.
The industrial dimension: when hardware becomes a bottleneck
Modern vehicles depend on an extensive range of semiconductors — from power management ICs to microcontrollers embedded in safety and navigation systems. Even a shortage in low-end, non-advanced chips can paralyze production lines.
This dependency exposes a structural weakness: Europe’s automotive sector is tightly coupled to Asian and U.S. semiconductor ecosystems, while domestic capacity remains insufficient to absorb sudden shocks.
The geopolitical layer: industrial policy meets national security
The Nexperia case illustrates the growing convergence of industrial policy and national security.
What began as a corporate governance measure by a European government has evolved into a geopolitical standoff affecting production in Germany — the EU’s automotive core.
This reflects a broader trend: the weaponization of supply chains. Export controls, technology restrictions, and ownership screenings have become instruments of statecraft, particularly in sectors such as semiconductors, AI, and electric mobility.
Implications for Europe’s industrial Strategy
- Strategic Dependence: The EU’s automotive industry remains reliant on external suppliers for both high-performance and legacy chips. The ability to sustain production under geopolitical stress is limited.
- Policy Response: Initiatives such as the European Chips Act and national “technological sovereignty” programs need acceleration, not only for innovation but for resilience.
- Corporate Governance and Transparency: Cases like Nexperia raise difficult questions about the ownership and control of technology firms operating within Europe’s critical sectors.
- Risk Management: Automotive OEMs must reassess supply-chain diversification strategies, build inventory buffers, and consider vertical integration where feasible.
A structural turning point
The Volkswagen disruption — even if temporary — signals more than a logistical hiccup. It represents a structural shift in the nature of industrial risk:
Economic resilience now depends on political foresight. A decision made in The Hague can stop production in Wolfsburg; a regulatory dispute in Beijing can delay deliveries in Barcelona.
Europe’s ambition to lead in sustainable and digital mobility cannot materialize without a secure and autonomous semiconductor ecosystem. Otherwise, the continent’s most iconic industries will remain hostage to the geopolitics of the microchip.