1D·

How attached we are to China without really realizing it... 🇨🇳🇪🇺

Rare earths, medicines and chips ... just to name 3 key areas. But most people in the forums are of the opinion that China is at least as dependent on us as we are on them... The example of Nexperia shows once again how far off the mark this is.

👉🏻 What happened?

The Dutch government has granted the Chinese owner Wingtech from controlling Nexperia last week

- officially due to security concerns and at the urging of the USA. The deposed Chinese CEO Zhang Xuezheng instructed employees in China to ignore orders from Europe while the Chinese government imposed export restrictions on Nexperia chips produced in China.

👉🏻 The potential consequences...dramatic

An acute chip shortage of so-called "chicken feed chips" in Germany and Europe. The chips produced by Nexperia are not highly complex and mass-produced, but Nexperia dominates this market virtually alone with a market share of just under 50%.

This is a huge problem for the automotive industry. Depending on the model, hundreds of these chips are installed in each car. But you can even find them in coffee machines etc. In other words, virtually everywhere that can be "controlled" in some way. So the problem is not just limited to the automotive industry, even if this is where it first appears.

Volkswagen has already announced short-time working for next week. The profitable models are now being prioritized, so the VW plants will be shut down first, but if a solution is not found soon, potentially Audi and Porsche as well. Mercedes, BMW and Bosch are also already warning of massive disruptions and once the supply chain is interrupted, it can take weeks or months to get it running smoothly again. The rat tail is simply enormous.

The production shock could be even greater than in corona times if no solution is found. This in turn could put thousands of jobs at risk. But it's interesting to see once again how little is being reported about this in the media (compared to the size of the problem - where is the chancellor?).

👉🏻 The solution - difficult...

Europe has no real leverage in my opinion and is caught between geopolitical tensions between the US and China. Do you piss off the US and release the company or do you stay the course and risk massive dislocation? Let's see...

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7 Comentários

Epi@Epi

Well, that's what happens when all those who have been warning for 20 years about the German car industry's dependence on a few politically sensitive suppliers have always been pushed aside as naysayers. Yield, yield, yield - that was the keyword. (See the debate on rare earths around 2007)

Now we have the salad. And I'm not sure if it's bad enough for German industry, in cooperation with European politicians, to fundamentally improve its position. At the moment, all the news sounds like desperate attempts to get rid of the problems without changing anything.

The main thing is that pensions are safe...

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Part_Time_Joe@Part_Time_Joe

@Epi But this generally applies to many industries... not just the automotive sector

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Epi@Epi

@Part_Time_Joe Of course! The dependence of the chemical industry on Russian gas is another issue. And the defense of the USA is another. At the moment, the next dependency is being built up in AI.

Europe is naked in most key industries. The competition is happy and is taking over market shares.

By disinvesting in the education sector, Europe is now also giving up its last trump card: its ability to innovate. We would rather import "qualified specialists" and make ourselves dependent on foreign education policies. 🤷

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Part_Time_Joe@Part_Time_Joe

@Epi If you look at it all, you could almost get the impression that there is simply no overarching strategy - no wonder, given the "experts" running around at European and federal level.

China has its 10-year plan and Trump also has clear ideas about the future (whether you like them or not). For us, the principle of hope seems to prevail.

Setbacks are sold as progress and the population celebrates it (e.g. CO2 reduction is mainly due to the decline in industrial production). BASF no longer produces in Germany, but soon in the largest plant next to Ludwigshafen - precisely in China.

Well then. There's no point getting worked up about it.

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Epi@Epi

@Part_Time_Joe The de facto overriding goal of the Europeans seems to be: Everything should stay as it is, nobody should have to change.
The strategy for achieving this goal is a mixture of conservatism and ad hoc panic actionism.
There is really no need to get upset about this. Rather, we should try to find our way around it or, better still, benefit from it.

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TradingHase@TradingHase

For me, an agreement at the expense of Europe is as good as certain. When the chips become available again, it will certainly be at a price premium.

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six@six

Shows once again that we have learned nothing from the pandemic and are once again relying too heavily on other countries

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