EU Moves to Exempt Chinese Power‑Semiconductor Maker Amid Auto Industry Supply Crunch

Image credit: Getty / Inna Fassbender

The European Commission is set to table a temporary exemption for a Chinese semiconductor supplier—most likely Yangzhou Yangjie Electronic Technology—from the EU’s latest Russia sanctions package. The move comes after a coordinated warning from the continent’s major automakers that their chip inventories could be exhausted within weeks if the waiver is not granted.

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What triggered the exemption request?

• Sanctions background: In March, the EU adopted its 20th Russia‑related sanctions round, adding 117 entities across energy, finance and the military‑industrial complex. Yangjie was listed among “third‑country” firms accused of shipping over 200 consignments of dual‑use technology to Russia since the invasion of Ukraine. The components were reportedly found in Russian drones and ammunition.
• Automotive fallout: After the Dutch government seized control of Nexperia (Wingtech’s European arm) in October 2023, many car manufacturers turned to Yangjie as a stop‑gap source for power semiconductors—rectifiers, MOSFETs, IGBTs and SiC devices. These parts are not cutting‑edge CPUs, but they are essential for voltage regulation, motor control and EV charging.
• Supply squeeze: With Beijing imposing export controls on Nexperia‑derived chips in response to the Dutch seizure, production lines at Honda, Volkswagen, Bosch and others have already faced temporary shutdowns. Distributors cite remaining Nexperia stockpiles lasting only until July or October, depending on the model.

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Technical snapshot of Yangjie’s product mix

Device type	Typical voltage rating	Typical current rating	Process node*	Typical automotive applications
MOSFET	30 V – 600 V	5 A – 150 A	200 mm Si (no advanced node)	Power‑train inverter, DC‑DC converters
IGBT	600 V – 1.2 kV	10 A – 200 A	150 mm Si (SiC in limited runs)	Traction inverter, on‑board charger
SiC rectifier	600 V – 1.2 kV	5 A – 100 A	150 mm SiC wafer	Fast‑charging EVs, high‑efficiency converters
Power diode	400 V – 800 V	10 A – 80 A	200 mm Si	Low‑side switching, auxiliary power supplies

*The node refers to the silicon wafer size and technology generation; Yangjie does not produce sub‑100 nm logic devices.

These parts are high‑volume, low‑margin items that automotive OEMs buy in the hundreds of millions per year. Their performance is measured more by thermal resistance (RθJC) and switching loss than by clock speed, which explains why Yangjie’s older Si and early‑generation SiC processes remain viable for many vehicle platforms.

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Why substitution is not trivial

1. Capacity constraints at alternative suppliers – Companies such as Infineon, STMicroelectronics and ON Semiconductor are already operating at 95‑100 % of their automotive‑grade fab capacity. Their lead times for a 600 V MOSFET are now 12‑16 weeks, compared with Yangjie’s typical 4‑6 week turnaround.
2. Qualification bottlenecks – Automotive parts must pass AEC Q100 and ISO‑26262 safety assessments. Re‑qualifying a new device can add 3‑6 months to the program schedule, especially for safety‑critical power modules.
3. Design compatibility – While many MOSFET families are pin‑compatible, differences in gate charge (Qg) and on‑resistance (RDS(on)) require PCB layout tweaks and firmware recalibration. For high‑volume models, those changes translate into millions of euros in re‑engineering costs.

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Market implications of the proposed derogation

• Short‑term relief: If the EU member states approve the exemption, Yangjie can continue shipping its power devices to European car factories for an estimated six‑month window. That would buy OEMs time to ramp up orders with legacy suppliers and to stockpile critical parts.
• Sanctions credibility: Carving out an exception less than a month after the sanctions package was adopted could be interpreted as a policy flexibility signal. It may encourage other industries to lobby for similar waivers, potentially diluting the overall impact of the EU’s Russia‑focused measures.
• Strategic dependence: The episode underscores how European automotive supply chains still rely on a handful of non‑EU sources for essential power components. Even after the Nexperia crisis, roughly 70 % of Nexperia chips produced in Europe are shipped back to China for backend assembly, creating a loop that can be disrupted by geopolitical friction.
• Long‑term shift: Analysts expect a re‑investment surge in EU‑based power‑device fabs. The European Commission’s “European Chips Act” earmarks €30 billion for advanced manufacturing, but the current crisis may accelerate projects like Infineon’s Dresden SiC line and ST’s Crolles 4 expansion.

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Outlook for the auto sector

• Inventory horizon: Assuming the exemption is granted, most distributors project that current Yangjie stock will sustain production until late Q4 2024. After that, the industry will need to replace 30‑40 % of its power‑device volume with alternative suppliers.
• Pricing pressure: With supply tight, the average price of a 600 V MOSFET has risen from €0.12 in early 2023 to €0.18 now, a 50 % increase. SiC devices have seen an even steeper jump, from €1.20 to €2.00 per unit.
• Potential bottlenecks: Even if the EU secures the waiver, logistical constraints—such as limited air‑freight capacity from China to Europe and customs clearance delays—could still cause regional shortages, especially in Eastern Europe where many factories are located.

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Bottom line

The EU’s contemplated exemption for Yangjie illustrates the tightrope between geopolitical enforcement and industrial continuity. While the short‑term fix may prevent a wave of production stoppages, it also highlights the structural vulnerability of European automotive supply chains to external policy shocks. The next six months will likely see a race to diversify power‑semiconductor sources, coupled with accelerated investment in domestic fab capacity, as the continent seeks to insulate its auto industry from future geopolitical turbulence.