German Auto Industry Faces New Semiconductor Woes Due to EU Sanctions

The German automotive industry has faced new difficulties in semiconductor supplies due to the European Union's anti-Russian sanctions, the Handelsblatt newspaper reported, citing executives at German companies within the sector.

The situation was triggered by Brussels' decision in April to include Chinese company Yangjie in the 20th package of sanctions against Russia.

"The loss of this supplier is having a significant impact on the automotive industry," Dominik Zillner, head of component supplier Components at Service, told the newspaper.

He explained that Yangjie was the company that partially replaced another semiconductor manufacturer, Nexperia, on the European market last fall after the latter encountered difficulties due to actions by the Dutch authorities. According to the publication's source, Nexperia's supply volumes to European customers have not yet recovered to their previous levels.

Noureddine Seddiqi, CEO of Frankfurt-based Sand & Silicon, told the newspaper that Yangjie's customers are reacting "nervously" to the sanctions against the company. Some companies need short-term support to cover their needs through alternative supplies, but this process is complicated by the fact that Yangjie's competitors are often already operating at full capacity and are therefore unable to quickly ramp up production, the publication notes.

"In our talks, we hear that many customers' Nexperia chip stocks will last until July or October. Accordingly, many companies expect the market situation to stabilize soon," Seddiqi said.