China has announced it will be relaxing its ban on chip exports to Europe, a policy that was put in place following a dispute with the Netherlands. The controversy began when Dutch authorities took over Nexperia, a chip manufacturer with Dutch roots but owned by a Chinese company, citing “serious governance shortcomings.” This action was taken to prevent potential disruptions to chip availability in emergency situations.
In response to the Dutch government’s intervention, China had previously stated it would not re-export completed Nexperia chips to Europe. This decision caused significant concern within the automotive sector, with industry associations describing the potential impact as “alarming.” Reports indicate that approximately 70% of chips manufactured in the Netherlands are typically sent to China for final processing before being re-exported globally.
On Saturday, China released a statement indicating a shift in its stance, saying it would “comprehensively consider the actual situation of enterprises and grant exemptions to exports that meet the criteria.” While the specifics of these criteria have not yet been detailed, this announcement signals a potential de-escalation of the trade tensions.
China also used the opportunity to criticize the Dutch government, attributing the “current disruption of global production and supply chains” to what it called “improper interference in the internal affairs of enterprises.”
Earlier this week, a letter obtained by Reuters revealed that Nexperia had informed its customers of its decision to halt the processing and re-export of chips back to China. This move had raised concerns about the immediate availability of essential components for European car manufacturers. The European Automobile Manufacturers’ Association (ACEA) had previously warned that chip supplies would only last for a few weeks if the Chinese ban remained in effect, potentially leading to production stoppages across the industry.
The timing of Beijing’s policy adjustment follows recent discussions between US President Donald Trump and Chinese President Xi Jinping. While President Trump mentioned that chip trade was discussed, official Chinese readouts did not explicitly detail this aspect of their talks. The White House is expected to release further details on its trade agreements with China later today, which may include the official resumption of Nexperia’s exports.
This situation is part of a broader global trend of scrutiny over semiconductor supply chains. In December 2024, the US government added Wingtech, Nexperia’s parent company, to its “entity list” due to national security concerns. In the UK, Nexperia was compelled to sell its silicon chip plant in Newport following similar national security considerations raised by government officials. The company continues to operate a facility in Stockport, UK.
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