Beijing: China announced that it will exempt certain Nexperia computer chips from an export ban, which posed a significant threat to EU car production. European automakers had expressed concerns that a shortage of chips from Nexperia could lead to shutdowns of production lines across Europe. The export ban was originally implemented due to a dispute with Dutch officials, causing alarm among European businesses.
According to France24.com, anxiety over potential chip shortages began when the Netherlands invoked a Cold War-era law in late September, effectively taking control of Nexperia. Nexperia's parent company, Wingtech, is backed by the Chinese government. In retaliation, China banned the re-export of Nexperia chips to Europe, accusing the United States of interfering in Dutch legal actions to remove Nexperia’s Chinese CEO.
Chinese and European Union representatives were scheduled to discuss the Nexperia situation during meetings in Brussels, as confirmed by EU spokesperson Olof Gill. Nexperia specializes in producing essential yet relatively simple technologies such as diodes, voltage regulators, and transistors. These components are crucial as modern vehicles increasingly depend on electronics.
While primarily used in cars, Nexperia's chips are also found in various industrial components and consumer electronics, including refrigerators and mobile devices. The company manufactures these chips in Europe before sending them to China for final processing and then re-exporting them to European clients.
European carmakers and parts suppliers had issued warnings about potential chip shortages from Nexperia, which they feared would cause production halts in Europe. Nexperia supplies 49 percent of the electronic components used in the European automotive sector, as reported by German financial daily Handelsblatt. The European auto lobby ACEA previously warned that production could be severely impacted by these shortages.
"Without these chips, European automotive suppliers cannot build the parts and components needed to supply vehicle manufacturers, and this therefore threatens production stoppages," ACEA stated. Although Nexperia’s chips are widely used, French parts maker OPmobility noted that they are not unique in terms of technology and could be substituted. However, new products must undergo approval by automakers, a process that takes time.
On Saturday, Beijing suggested that some shipments would resume, with the Chinese ministry spokesperson stating that companies experiencing difficulties could reach out to the ministry or local commerce authorities.