Beijing has announced plans to ease a chip export ban that it had imposed after Dutch authorities took over Nexperia, a Chinese-owned chipmaker based in the Netherlands.
In September, the Netherlands invoked a Cold War-era law to take control of Nexperia, citing 'serious governance shortcomings' that could affect chip availability - which are essential for automobile manufacturing especially in emergencies.
In response to the takeover, China initially expressed it would halt re-exports of chips made by Nexperia at its Chinese factories to Europe. This sparked concerns from major automotive players like Volvo Cars and Volkswagen, warning that such a decision could lead to temporary plant shutdowns.
On Saturday, officials in Beijing indicated they might grant exemptions to specific firms from the export suspension.
Approximately 70% of Nexperia's chips manufactured in Europe are shipped to China for further processing before being exported elsewhere. The Chinese government recently stated: 'We will comprehensively consider the actual situation of enterprises and grant exemptions to exports that meet the criteria,' though it did not clarify what those criteria entail.
Additionally, the Chinese authorities condemned the 'improper intervention' by the Dutch government, attributing it to the current disruptions in the global supply chain.
Last week, communications from Nexperia to its customers indicated that the company would cease sending chips to China for processing and was exploring alternative measures to ensure supply continuity.
Nexperia, headquartered in the Netherlands, is owned by Wingtech, a company tied to Chinese governmental interests, which acquired the Dutch business in 2018. In October, Nexperia's CEO, Zhang Xuezheng, was removed from his position following a Dutch court ruling that suspended him as a director due to concerns over managerial issues.
The Dutch Ministry of Economic Affairs remarked on the significant 'managerial shortcomings' observed under Zhang's leadership, claiming that Nexperia's operations in Europe were unacceptably compromised.
Last month, the European Automobile Manufacturers' Association warned that if the Chinese export ban on Nexperia chips continued, supplies would only last a few weeks, jeopardizing the production capabilities of European automotive suppliers.
'Without these chips, European automotive suppliers cannot manufacture the necessary parts for vehicle manufacturers, risking production stoppages,' the association cautioned.
This recent pivot from China to potentially alleviate its export controls comes on the heels of a meeting between US President Donald Trump and Chinese President Xi Jinping earlier this week in South Korea, where discussions reportedly touched on semiconductor issues.
The White House is expected to disclose a fact sheet summarizing new trade agreements with China later today.
In December 2024, the US government designated Wingtech as a national security concern, placing it on an 'entity list.' Meanwhile, in the UK, Nexperia faced pressure from MPs and ministers regarding national security, prompting the sale of its silicon chip plant in Newport, though it retains a facility in Stockport.
