China has announced it will relax a chip export ban to Europe, which was imposed after Dutch authorities took over the Chinese-owned chipmaker Nexperia in the Netherlands. The move follows warnings from the European Automobile Manufacturers' Association about potential production stoppages and recent international diplomatic engagements.
China's Policy Shift
Beijing has stated it will ease a chip export ban that followed Dutch authorities' takeover of Nexperia, a Chinese-owned chipmaker located in the Netherlands. China indicated it would "comprehensively consider the actual situation of enterprises and grant exemptions to exports that meet the criteria," though specific criteria were not detailed.
Dutch Intervention and Supply Chain Dynamics
In September, the Netherlands utilized a Cold War era law to assume control of Nexperia, citing "serious governance shortcomings" and the aim to prevent chip unavailability in an emergency. This action led to China's imposition of an export ban. Approximately 70% of chips manufactured in the Netherlands are sent to China for completion and subsequent re-export. Following the Dutch takeover, the Dutch-controlled Nexperia informed customers it would cease sending chips to China for processing.
Industry Concerns and China's Criticism
China had previously stated it would not re-export completed Nexperia chips to Europe, a stance that prompted concern among carmakers. The European Automobile Manufacturers' Association (ACEA) warned that Nexperia chip supplies would only sustain operations for a few weeks without a lifted ban, stating: "Without these chips, European automotive suppliers cannot build the parts and components needed to supply vehicle manufacturers and this therefore threatens production stoppages." Beijing criticized the Hague's actions as "improper interference in the internal affairs of enterprises" and attributed "the current disruption of global production and supply chains" to the Dutch intervention.
International Engagement and Related Developments
The announcement of relaxed export controls occurred after a meeting between Donald Trump and Xi Jinping in South Korea. Trump later stated that chips were a topic of discussion between the leaders, though Beijing's post-meeting statement did not explicitly mention trade. The White House is anticipated to release a fact sheet detailing a new trade agreement with China, which is also reported to confirm the resumption of Nexperia exports.
Separately, in December 2024, the US government placed Wingtech, Nexperia's parent company, on its "entity list," identifying the company as a national security concern. In the UK, Nexperia was compelled to sell its silicon chip plant in Newport after national security concerns were raised by members of parliament and government ministers. Nexperia also operates a facility in Stockport, UK.