Beijing has announced plans to loosen its chip export ban, a measure initially imposed following the Dutch takeover of Nexperia, a Chinese-owned chipmaker headquartered in the Netherlands.
In September, the Netherlands invoked a Cold War-era law to take control of Nexperia, citing serious governance shortcomings that could impact the production of crucial chips, essential for the automotive sector. In retaliation, China announced it would halt the re-export of Nexperia chips produced in its factories to Europe, prompting warnings from major car manufacturers like Volvo and Volkswagen about potential plant shutdowns.
Recently, Chinese officials indicated they might grant exemptions to individual firms from the ban, stating they would comprehensively consider the actual situation of enterprises. No specific criteria for these exemptions were clarified, but the Chinese government criticized the Netherlands' actions as improper intervention in business affairs, which they claimed has contributed to chaos in global supply chains.
Approximately 70% of Nexperia chips manufactured in Europe are processed in China before being exported. Nexperia has recently informed its customers that it would halt chip shipments to China for processing, while exploring alternative methods to maintain supply continuity.
Nexperia is under scrutiny due to concerns that its operations, although established in the Netherlands, are jeopardized by its ownership ties to Wingtech, a Chinese firm. Following a court decision, Nexperia’s CEO was removed amidst claims of managerial failures.
Last month, the European Automobile Manufacturers' Association cautioned that without a lifting of the Chinese export ban, Nexperia chip supplies could be depleted in a matter of weeks, threatening the production capabilities of European automotive suppliers.
This development of China potentially reversing its stance on chip exports coincides with diplomatic dialogues; notably, a meeting between US President Donald Trump and Chinese President Xi Jinping where trade, including semiconductor issues, was discussed.
Further adding to the complexity of this situation, the US government has placed Wingtech on its entity list over national security concerns. Meanwhile, Nexperia was also compelled to divest its silicon chip plant in the UK due to governmental national security apprehensions.
