Beijing has announced a decision to loosen the ban on chip exports that was imposed following the Dutch takeover of Nexperia, a Chinese-owned chipmaker based in the Netherlands.
In September, the Netherlands invoked a Cold War-era law to take control of Nexperia, claiming serious governance shortcomings that could jeopardize chip availability, crucial for the automotive industry during emergencies.
In retaliation, China declared it would stop the re-export of Nexperia chips processed in its factories to Europe, prompting companies like Volvo and Volkswagen to warn of possible production shutdowns due to chip shortages.
On Saturday, the Chinese government signaled a potential change in policy, stating it would consider granting exemptions to certain firms from the export restrictions.
Approximately 70% of Nexperia chips produced in Europe are sent to China for further processing before being dispatched globally. In its recent announcement, the Chinese government stated, We will comprehensively consider the actual situation of enterprises and grant exemptions to exports that meet the criteria, though it did not specify the criteria.
China criticized the Dutch government's actions as an undue interference in corporate affairs, which it argued contributed to current disruptions in global supply chains.
Recently, within a letter obtained by Reuters, Nexperia informed its customers that it would cease shipments of chips to China for processing and was exploring alternative methods to ensure continuity of supply for its clients.
Although Nexperia is based in the Netherlands, it is owned by Wingtech, a company with backing from the Chinese government that acquired it in 2018.
In October, Nexperia's CEO, Zhang Xuezheng, was removed from his position following a Dutch court suspension amid claims of severe managerial deficiencies and negative impacts on the company's operations in Europe.
The Dutch Ministry of Economic Affairs expressed worry about management issues that jeopardized Nexperia's European operations.
Last month, the European Automobile Manufacturers' Association (ACEA) warned that Nexperia's chip supplies could dwindle within weeks if the Chinese ban wasn't lifted, stating that without these chips, European automotive suppliers would be unable to manufacture essential vehicle components, leading to production halts.
This recent shift in Beijing's export policy follows a meeting between US President Donald Trump and Chinese President Xi Jinping earlier this week, where discussions on the chip industry reportedly took place, although specifics were not disclosed in official communications.
The White House is anticipated to publish details of a new trade agreement with China in the coming days.
In December 2024, the US government added Wingtech to its entity list, labeling the firm a national security concern, while in the UK, Nexperia faced pressure to divest its semiconductor plant in Newport due to security worries.
