China has moved to ease its export ban on semiconductors from Nexperia to Europe, following a diplomatic row with the Netherlands over the Dutch government’s takeover of the chipmaker. This decision, announced on Saturday, aims to prevent potential disruptions in the European automotive industry, which relies heavily on these components.
The Chinese Commerce Ministry stated that it would grant exemptions to exports of Nexperia chips that meet certain criteria, though specific details were not provided. This announcement comes after China imposed export controls in October, retaliating against the Netherlands’ invocation of a Cold War-era law to seize control of Nexperia in September. The Dutch government cited serious governance shortcomings and concerns over chip availability in emergencies as reasons for its intervention.
Nexperia, while headquartered in the Netherlands, is owned by China’s Wingtech Technology, and its chips are crucial for various industries, particularly automotive. Approximately 70% of Nexperia chips manufactured in Europe are sent to China for finishing before being re-exported, making the export ban a significant threat to supply chains. European carmakers had warned that without these chips, production could halt within weeks, as alternative suppliers are not readily available.
The impact of the ban was felt acutely by companies like Volvo Cars and Volkswagen, who expressed fears of temporary plant shutdowns. The European Automobile Manufacturers’ Association (ACEA) emphasized that the chips are essential for building parts and components, and their absence would directly threaten vehicle manufacturing across the continent. This situation underscored the vulnerability of global supply chains to geopolitical tensions.
In response to the crisis, Nexperia had begun developing alternative solutions to ensure supply continuity for its customers, even as it faced leadership changes, including the ousting of its CEO by a Dutch court. The company’s efforts to mitigate the disruption were part of a broader attempt to navigate the complex international landscape.
The easing of export restrictions may be linked to broader diplomatic efforts, including a recent meeting between US President Donald Trump and Chinese President Xi Jinping in South Korea, where semiconductor trade was reportedly discussed. Additionally, EU Trade Commissioner Maros Sefcovic confirmed that China has suspended the export controls for the EU, and both sides are committed to ongoing dialogue to improve the implementation of these policies.
This development highlights the intricate connections between trade, technology, and international relations. As the global economy grapples with supply chain vulnerabilities, the resolution of this dispute may set a precedent for how similar conflicts are managed in the future, emphasizing the need for cooperation and clear communication between nations.