From the perspective of European chip companies, China is a reliable pillar in their expansion strategies despite a recently stuttering growth momentum. This applies in particular to the future fields of electromobility and autonomous driving. In view of the fading euphoria in Western Europe with regard to the prospects of electric cars, semiconductor companies are pointing out that business in China is going well instead, more than compensating for setbacks elsewhere.

This message has lost credibility since the Bloomberg news agency recently spread the rumor that Beijing is demanding that emerging Chinese car manufacturers should use more domestically produced chips. A decision of this kind would be understandable, as the Middle Kingdom has some catching up to do in this area. The West - including South Korea and Japan - and Taiwan are far ahead in the field of electronic components.

Investors reacted very nervously to the news. The shares of Infineon, based in Neuperlach near Munich, the Italian-French manufacturer STMicroelectronics and the Dutch manufacturer NXP plummeted. The shares of Germany's largest semiconductor group have lost almost 10% since last Thursday, while the shares of the two competitors mentioned above have each lost 6%. Although the share price recovered slightly on Monday, this does not represent a turnaround.

The latest news fits into the picture of an increasingly geopolitically tense situation. Trade conflicts are on the rise in a multipolar world. The dispute in this area between Beijing and Washington could escalate if Donald Trump moves into the White House for a second time. Meanwhile, the EU is threatening to impose penalties on electric car imports from China.

In this mixed situation, countermeasures by China would be a blow to Infineon and its competitors. The automotive business accounts for over half of the turnover of the DAX member; China accounts for a third of its revenue. A move by Beijing to promote its own high technology would cause the business models of many chip manufacturers in the West to falter. China is developing into a cluster risk due to increased uncertainty. For investors, this means that the volatility of chip stocks with a strong automotive focus is increasing.