00:00Nothing works in the automotive industry without semiconductors.
00:04They perform important functions in vehicle electronics
00:07and are critical for airbags, braking systems and other features.
00:11With a market share of 40%, Nexperia is the world's largest supplier of such semiconductors,
00:18but supply problems threaten its ability to deliver its products.
00:22Nexperia has been run by a Chinese parent company since 2018,
00:26but in September, the Dutch government took control, citing Dutch and European security interests.
00:33The problem for Nexperia, its semiconductors are heavily dependent on components from China,
00:38which they are now unable to access.
00:41This could have dramatic consequences for the automotive industry and not only in Germany.
00:46All the chips which are currently coming from Nexperia China
00:50are delivered to automotive Tier 1 suppliers who are using these chips,
00:56which are not high-tech chips, but just very normal chips.
01:00And they are delivering pretty much to all the European manufacturers.
01:03So everybody who's buying Nexperia chips is actually affected,
01:07and this seems to be pretty much all of the European manufacturers.
01:12For now, Volkswagen will be able to avoid halting its production.
01:16But the race for long-term solutions is on.
01:19The automaker is apparently in contact with several potential chip suppliers.
01:25It's high time, because switching to a new product will take time.
01:29So a car usually, or any type of vehicles, is for every part, which is built into this vehicle,
01:38will be type-approved, homologated.
01:41So if you change a part, not because it's a new generation,
01:44but really from the delivery side, the supplier side,
01:47you need to have it re-approved.
01:49And that takes weeks, months.
01:51For now, the auto industry hopes for a speedier process.
01:57The EU Commission has also involved itself trying to lower the temperature on trade with China,
02:03so that production stops across Europe can be avoided.
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