China said on Saturday it will exempt some Nexperia chips from an export ban that was imposed after a dispute with Dutch officials and that has alarmed European companies.
Anxiety over chip shortages began when the Netherlands invoked a Cold War-era law in late September to effectively take control of Nexperia, whose parent company Wingtech is backed by the Chinese government.
China, in response, banned any re-export of Nexperia chips to Europe and accused the United States of meddling in Dutch legal proceedings to remove Nexperia’s Chinese CEO.
Beijing blamed what it said on Saturday was “the Dutch government’s inadequate intervention in the internal affairs of companies” for leading to the “current chaos in the global supply chain.”
“We will comprehensively consider the actual situation of companies and grant exemptions to exports that meet the criteria,” a spokesperson for the Chinese Ministry of Commerce said in a statement, without offering details.
The resumption of some Nexperia shipments was part of a trade deal agreed to by Chinese President Xi Jinping and his U.S. counterpart Donald Trump after talks in South Korea on Thursday, the Wall Street Journal reported, citing unnamed sources.
Chinese and European Union officials will also discuss Nexperia during their meeting in Brussels, EU spokesman Olof Gill said.
Those talks on Friday were “a good opportunity for both sides to update each other on…the introduction and implementation of export controls,” Gill said in a statement Saturday.
Discussions covered “controls on rare earths introduced or proposed by China, as well as an update on controls and developments by the EU,” he said.
The statement does not specifically mention Nexperia.
On the other hand, Berlin welcomed Beijing’s move on Saturday as a “positive sign.”
“The latest reports from China are positive initial signs of an easing of tensions,” an Economy Ministry spokesperson said. AFP.
He stressed that “a final assessment” of the implications of Beijing’s announcement is not yet possible.
Automaker Anxiety
Nexperia produces relatively simple technologies such as diodes, voltage regulators and transistors that are nevertheless crucial as vehicles become increasingly reliant on electronics.
Its chips are primarily found in automobiles, but also in a wide range of industrial components, as well as consumer and mobile electronics such as refrigerators.
The company manufactures them in Europe before shipping them to China for finishing and then re-exporting them to European customers.
European carmakers and parts suppliers had warned of a shortage of chips supplied by Nexperia that would force production lines in Europe to stop.
According to German financial newspaper Handelsblatt, the chipmaker supplies 49% of the electronic components used in the European automotive industry.
European car lobby ACEA warned last month that production would be seriously affected.
Nexperia chips, although widely used, are not “unique” in terms of technology and therefore “easily replaceable”, said French parts manufacturer OPmobility.
However, suppliers must obtain approval of new products from automakers, which takes time.
Beijing suggested on Saturday that some shipments would resume.
Companies experiencing difficulties could contact the Ministry of Commerce or local authorities, the Chinese spokesperson said.
