• China has granted export exemptions for Nexperia chips crucial for civilian use, easing supply chain pressures.
• The Dutch government’s control over Nexperia aimed to protect European semiconductor supply chains.
• Chinese Commerce Ministry calls for EU to influence the Netherlands to reverse its seizure of Nexperia.
• Nexperia's previous export restrictions raised concerns about potential automotive production shutdowns.

China has lifted export controls on Nexperia chips intended for civilian applications, according to the Chinese commerce ministry. This decision is poised to alleviate significant supply shortages affecting the global automotive industry, which has been grappling with previous export restrictions that began after the Dutch government took control of Nexperia, a critical supplier for automotive semiconductors. The announcement reflects China’s intention to protect global chip supply chains while navigating ongoing geopolitical tensions, particularly with the Netherlands and the EU, over the ownership and operation of Nexperia, which is based in the Netherlands but owned by China’s Wingtech Technology, according to BBC and Indiatimes.

The exemption was reintroduced following rising concerns from major automotive manufacturers, including Volvo Cars and Volkswagen, about the imminent risks of production halts due to chip shortages, as supplies were dwindling rapidly. The European Automobile Manufacturers' Association reported that without the lifting of the Chinese ban, Nexperia's chip supplies could be exhausted within weeks. In a recent update, EU trade commissioner Maros Sefcovic indicated that measures were being taken to streamline export regulations to facilitate the flow of these essential chips, highlighting the ongoing commitment to restoring stability in semiconductor supply chains, according to Channel News Asia and Anadolu Agency.

Despite the easing of export controls, bilateral relations between China and the Netherlands remain strained. Following the control takeover, there have been indications that the Netherlands continues to be cautious about allowing Nexperia to operate freely, primarily due to national security concerns. The Chinese commerce ministry has urged the EU to “intensify efforts” to convince the Netherlands to rectify its actions regarding Nexperia’s management, signaling that diplomatic solutions are still in demand for a more stable semiconductor supply chain. This ongoing dispute accentuates the geopolitical factors influencing critical industries worldwide, according to Indiatimes, Channel News Asia, and Anadolu Agency.