• China will exempt certain Nexperia chips from an export ban imposed due to a dispute with the Netherlands.
• The Dutch government invoked a Cold War-era law to take control of Nexperia over governance issues.
• A trade agreement between Xi Jinping and Donald Trump appears to have influenced China's decision to ease restrictions.
• Nexperia plays a critical role in the supply of automotive chips, providing 49% of components used in the European automotive industry.
• European automakers have expressed concern over potential production disruptions due to chip shortages.

China's Ministry of Commerce announced on Saturday that it would exempt some Nexperia chips from an export ban, which was previously imposed after the Netherlands seized control of the Dutch-owned chipmaker. The ministry stated, "We will comprehensively consider the actual situation of enterprises and grant exemptions to exports that meet the criteria," aiming to stabilize the supply chain amidst rising tensions in global markets, according to South China Morning Post and Channel News Asia.

The conflict began when Dutch authorities invoked a Cold War-era law in late September to effectively take control of Nexperia, citing "serious governance shortcomings,” which prompted China to impose a ban on Nexperia chip re-exports to Europe. This has raised alarm among European businesses relying on these chips, which are crucial for automotive and electronic components, according to BBC and India Times.

During high-level discussions between Chinese President Xi Jinping and US President Donald Trump in South Korea, the two leaders reportedly addressed issues surrounding chip exports, leading to the decision to partially resume Nexperia shipments. This directions reflects an attempt to relieve tensions that had developed since the Netherlands’ intervention, which Beijing has criticized as "improper interference," according to The Jakarta Post and BBC.

European automotive manufacturers have expressed significant concern, with reports indicating that Nexperia accounts for 49% of the electronic components used in the European automotive sector. They have warned that extended restrictions on chip supplies could lead to production halts in crucial manufacturing areas, as warned by the European Automobile Manufacturers' Association (ACEA) and echoed by financial analyses from India Times and South China Morning Post.