On May 22, the European Commission is considering granting a temporary exemption to Chinese semiconductor manufacturer Yangjie Electronics Technology, shielding it from the EU’s sanctions against Russia. European automakers have warned that without such an exemption, their chip inventories would quickly run out, potentially forcing factories to halt production. Yangjie Electronics produces power semiconductor components—including rectifiers, MOSFETs, IGBTs, and SiC devices—which, although not advanced-node chips, are critical basic components in automotive electronics systems and cannot be easily replaced in the short term. This supply risk stems from China’s imposition of export controls in response to the Dutch government’s takeover in 2023 of Nexperia, a company previously controlled by Chinese investors. Those controls caused temporary production stoppages at several European carmakers. Since then, Yangjie Electronics has become a key alternative supplier for European automakers. If Yangjie were included under the sanctions, it would sever Europe’s current primary supply channel. Distributors note that competitors’ production capacities are already near saturation and cannot quickly fill the gap. Moreover, about 70% of Nexperia’s chips manufactured in Europe still need to be shipped to China for back-end packaging before being exported—a clear indication of Europe’s heavy reliance on China’s backend manufacturing capabilities in the semiconductor supply chain. This dependence also means future geopolitical tensions could once again disrupt supply stability in the industry.