Beijing has announced plans to relax an export ban on chips following the Dutch government’s takeover of Nexperia, a chipmaker owned by a Chinese company and based in the Netherlands. This takeover occurred in September when Dutch authorities invoked a Cold War-era law, citing “serious governance shortcomings” and potential risks to chip availability in emergencies.
In response to the takeover, China had implemented a ban on the re-export of completed Nexperia chips to Europe, which raised concerns among automotive manufacturers. Approximately 70% of chips produced in the Netherlands are sent to China for final processing and subsequent re-export to various countries. The European Automobile Manufacturers’ Association (ACEA) warned that supplies from Nexperia would be insufficient to meet industry needs unless the Chinese ban was revoked, stating that a lack of these chips could lead to production halts in Europe.
On a recent Saturday, China indicated it would consider exemptions to its export policies based on the specific circumstances of enterprises, although details regarding these exemptions remain unspecified. Beijing criticized the Netherlands for what it described as “improper interference” in corporate affairs and attributed the disruption in global supply chains to such actions.
Nexperia has communicated to its customers that it will cease sending chips back to China for processing, a decision that could impact the automotive supply chain. Reports surfaced that these developments followed a meeting earlier in the week between Donald Trump and Xi Jinping in South Korea, where the topic of chips was discussed, although China’s official statements on the meeting did not address trade matters directly.
As part of ongoing developments, the White House is set to release a fact sheet detailing a new trade agreement with China, which is expected to announce the resumption of Nexperia exports. Additionally, the US government has previously listed Wingtech as a national security concern, and in the UK, Nexperia was required to divest its silicon chip plant in Newport due to national security worries, although it continues to operate a facility in Stockport.
Source: https://www.bbc.com/news/articles/cly44qwgnx0o?at_medium=RSS&at_campaign=rss