What does chip shortage mean for European car companies?

When the production line of Volkswagen in Wolfsburg, Germany quietly reduces its schedule, when the boards of directors of BMW and Mercedes Benz are brightly lit late at night to calculate chip inventory, and when the European Automobile Association issues an emergency warning that "chip inventory cannot last for a few weeks", an industrial storm caused by small chips is sweeping across the European automotive industry. As a traditional hub of the global automotive industry, European car companies contribute nearly 10% of Germany's GDP and support millions of jobs. However, the ongoing chip shortage crisis has evolved beyond a simple supply chain issue into a deep test of industry survival, technological roadmap, and global competitiveness.

The most direct impact of chip shortage on European car companies is the double blow of production stagnation and huge economic losses. As a global leader in automotive grade power semiconductors, Anshi Semiconductor has a product market share of over 30%, covering key areas such as body control and power systems, making it the "industrial vitamin" of the automotive industry. The supply disruption caused by the Dutch government's forced takeover of its UK factory has directly led to a halving of production capacity for core component suppliers such as Bosch. Giant chip inventories such as Volkswagen and BMW can only last for a few weeks, and popular car production lines such as Golf and Tiguan have been forced to shut down. Volkswagen's single factory has a potential daily loss of up to 40 million euros.

The deeper impact is that the chip shortage has completely exposed the fragility of the European automotive industry chain, breaking its long-standing supply chain confidence. European car companies have built strong global competitiveness in traditional components such as engines and transmissions, but have formed a global division of labor pattern in the field of automotive grade chips, with "design relying on Europe, manufacturing relying on Asia, and packaging and testing relying on China". After the production system of "European chip manufacturing+Chinese packaging and testing" by Anshi Semiconductor was disrupted by political factors, European car companies realized that the strict certification cycle of 18-24 months for automotive grade chips made short-term search for alternative suppliers meaningless, and the procurement cost of some alternative products even increased by 20-30%.

The chip shortage has also forced European car companies to accelerate their technological roadmap adjustments and supply chain restructuring, driving the industry into a painful period of transformation. Faced with the supply crisis, European car companies have launched self-help measures: Volkswagen has established a chip procurement emergency team, stationed at semiconductor factories to closely monitor the resumption of production progress, and urgently negotiated long-term supply agreements with TSMC and Samsung; BMW adopts an "internal adjustment" strategy, allocating idle chips from high-end models to main models; Mercedes Benz achieves chip compatibility through software upgrades, reducing reliance on specific models of chips. Although these emergency measures can alleviate the urgent situation, they are difficult to fundamentally solve the problem, forcing European car companies to re-examine supply chain security.

In the long run, the chip shortage is a painful but necessary "industry examination" for European car companies. It reveals the core contradictions in the traditional automotive industry's transformation towards intelligence and electrification, and also forces European car companies to rethink their industry positioning and development strategies. This crisis proves that in today's deeply integrated global industrial chain, no country can stand alone. Unilateralism and protectionism will only exacerbate industrial turbulence. The case of the Dutch government forcibly taking over chip factories ultimately harming Europe's own interests is the best evidence. If European car companies can take this crisis as an opportunity to accelerate their domestic chip industry layout, build a diversified and resilient supply chain system, and deepen benign cooperation with the global industrial chain, they are still expected to maintain their leading position in the global automotive industry. But if the dual bottleneck of chips and software cannot be overcome and the European automotive industry continues to rely on external supply, it may lose its dominant position in the global value chain and become an "assembly plant" rather than an "innovator".

Although chips are small, they are crucial to the lifeline of the industry. For European car companies, chip shortage is not a crisis that can be quickly resolved, but a protracted battle that concerns life and death. It means short-term pain and loss, but more importantly, long-term transformation and rebirth. In this wave of global automotive industry restructuring, only those enterprises that can quickly adjust their strategies, control core technologies, and build resilient supply chains can cross the cycle and continue the glory of the European automotive industry. And all of this began with a clear understanding of the importance of chips and a firm transformation towards a new model of "independent controllability+open cooperation".