The European and US auto industries are bracing themselves for disruption to the supply chains of the low-value semiconductors vital to modern cars, a threat similar to the chip shortages that caused chaos for the sector and led to long lead times for deliveries during the pandemic.

Their predicament relates to the seizure of a small Dutch semiconductor manufacturer by the Dutch government earlier this month, which has frozen supply of the myriad microchips used in electronic systems in cars that control everything from lights to airbags, locks and windows.

The output of companies like BMW,  Mercedes-Benz,  Stellantis, Toyota and Volkswagen are all under threat.Credit: AP

Carmakers are scrambling to find alternative suppliers after the Dutch government gained court approval to take control of Nexperia, the Dutch subsidiary of a Chinese company, Wingtech. Wingtech acquired Nexperia in 2019 from a group of Chinese investors who had bought it in 2017.

Last year the US put Wingtech on its trade blacklist, claiming it was helping China circumvent US restrictions on access to advanced semiconductor manufacturing technology.

That prompted the Dutch government to urge Nexperia, whose chief executive Zhang Xuezheng is the founder and major shareholder in its parent company, to take steps to create operational independence from Wingtech. Zhang resisted, arguing that ringfencing his Dutch subsidiary would be too restrictive of its shareholders’ rights.

Then, on September 29, the US extended its blacklist to include subsidiaries of companies on the list, which brought Nexperia into its net.

It was that expansion of the blacklist that prompted China to tighten restrictions on exports of rare earths and products that........

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