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European automakers warn of production risks amid Dutch-China dispute over chipmaker Nexperia

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European carmakers are warning of potential production disruptions as a trade and technology dispute between China and the Netherlands over chipmaker Nexperia threatens to choke off the supply of critical automotive chips.

The European Automobile Manufacturers’ Association (ACEA) said on Thursday it was “deeply concerned” that Nexperia’s inability to guarantee chip deliveries could halt production at European factories. “Without these chips, automotive suppliers cannot build the parts and components needed to supply vehicle manufacturers,” ACEA said, urging an immediate resolution.

Nexperia, which supplies chips essential for vehicle electronics, told customers last week that deliveries could no longer be guaranteed. The company said it is engaging with Chinese authorities to obtain an exemption from export restrictions, but declined to give further details.

The dispute erupted after the Dutch government seized control of Nexperia on September 30, citing concerns over the possible transfer of technology to its Chinese parent company Wingtech, which is subject to U.S. export controls. Washington added Wingtech to its entity list in December, triggering restrictions that now extend to Nexperia under U.S. law.

In response, China’s commerce ministry imposed export controls on Nexperia China and its subcontractors, banning them from exporting certain chip components. The escalating standoff places Europe’s car industry in the crossfire of a widening U.S.-China tech war.

Nexperia’s chips are not high-end semiconductors but are produced in mass volumes crucial for car electronics. Major manufacturers including Volkswagen, BMW, Mercedes-Benz, and Stellantis, as well as suppliers like Bosch, said they are assessing risks and exploring contingency plans.

China’s commerce ministry criticized the Dutch government’s intervention, saying it “opposes interference in enterprises through administrative means” and vowed to protect Chinese companies’ rights.

Bosch and Tenstorrent Forge Partnership to Standardize Automotive Chip Development

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German industrial powerhouse Bosch is joining forces with U.S. chip startup Tenstorrent to spearhead an initiative aimed at standardizing the building blocks of automotive chips. This partnership is set to revolutionize the way modern vehicles are powered and controlled, addressing the growing complexities of automotive electronics. According to Tenstorrent executives, the collaboration will focus on creating a standardized methodology for utilizing “chiplets,” a modular approach that allows for flexibility and efficiency in chip design.

Chiplets, which are small, self-contained units of silicon that can be combined in various configurations, represent a significant advancement in semiconductor technology. By developing a standardized platform for these chiplets, Bosch and Tenstorrent aim to create systems capable of meeting the diverse and evolving needs of modern vehicles. David Bennett, Tenstorrent’s chief customer officer, emphasized that the goal is to enable the automotive industry to rapidly adapt to new technologies, such as electric vehicles and autonomous driving features, without incurring excessive costs.

The partnership is expected to significantly streamline the development process for automotive chips. By enabling manufacturers to mix and match different quantities and types of chiplets, Bosch and Tenstorrent will facilitate the creation of custom processors tailored to specific vehicle requirements. This not only reduces the costs associated with chip production but also accelerates the time-to-market for new silicon products, allowing automakers to respond swiftly to changing consumer demands and technological advancements.

As the automotive sector continues to embrace smart technology, the collaboration between Bosch and Tenstorrent could set new standards for the industry. The two companies plan to leverage their respective expertise to innovate in chip design and manufacturing, ensuring that the resulting products are not only efficient but also capable of supporting the latest features in vehicle connectivity and performance. This partnership could pave the way for more versatile and powerful automotive systems, marking a new era in the integration of technology and transportation.