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China softens stance on Nexperia chip export ban
Beijing announced Saturday it would relax restrictions on re-exporting completed semiconductor chips to Europe, following a months-long dispute triggered by the Dutch government's takeover of Chinese-owned chipmaker Nexperia in September. The move comes amid warnings from European automakers about looming production halts due to supply chain disruptions.
Background: Dutch takeover and Chinese retaliation
In September 2025, the Netherlands invoked a Cold War-era law to seize control of Nexperia-a Chinese-owned semiconductor manufacturer headquartered in the country-citing "serious governance shortcomings." The Dutch government justified the move as a precaution to ensure chip availability during emergencies. In response, China imposed a ban on re-exporting Nexperia's completed chips to Europe, a decision that alarmed automakers, given that roughly 70% of chips produced in the Netherlands are sent to China for final processing before global distribution.
The European Automobile Manufacturers' Association (ACEA) warned last month that without Chinese processing, Nexperia's chip supplies would dwindle within weeks, risking "production stoppages" across the continent. "Without these chips, European automotive suppliers cannot build the parts and components needed," the group stated in an October advisory.
China's conditional easing of restrictions
In a statement released Saturday, Chinese authorities said they would "comprehensively consider the actual situation of enterprises and grant exemptions to exports that meet the criteria," though no specific conditions were disclosed. The announcement marked a shift from Beijing's earlier criticism of the Dutch government's intervention, which it had labeled "improper interference in the internal affairs of enterprises" responsible for "disrupting global production and supply chains."
According to a customer letter obtained by Reuters this week, the now Dutch-controlled Nexperia had already informed clients it would cease sending chips to China for processing-a decision that compounded supply chain pressures. The company's UK operations, including a facility in Stockport, remain unaffected by the dispute, though it was previously forced to divest its Newport silicon plant in 2024 due to British national security concerns.
Diplomatic context: US-China trade talks
The relaxation of export controls follows a meeting earlier this week between US President Donald Trump and Chinese President Xi Jinping in South Korea. While Trump's post-meeting remarks mentioned discussions on semiconductor trade, Beijing's official readout omitted specific references to chips or broader trade agreements. The White House is expected to release a detailed fact sheet later Saturday outlining a new US-China trade accord, with Reuters reporting that the resumption of Nexperia exports will be among the announcements.
The dispute underscores broader tensions in the global semiconductor sector. In December 2024, the US added Chinese chipmaker Wingtech to its "entity list," flagging it as a national security risk-a move that further strained US-China tech relations.
Industry reaction and next steps
While Beijing's concession offers temporary relief, automakers and suppliers remain cautious. The ACEA has yet to comment on whether the exemptions will suffice to avert shortages, and Nexperia's long-term operational strategy under Dutch control remains unclear. Industry analysts note that the dispute highlights Europe's vulnerability to supply chain disruptions amid geopolitical friction.
"Supplies have stabilized, but conservation remains essential."
European Automobile Manufacturers' Association (ACEA), October 2025
