China to loosen export ban Nexperia chips, car manufacturers watching closely

China will exempt certain orders from chip manufacturer Nexperia from the export ban to Europe, the Chinese Ministry of Commerce announced on Saturday. Exports were halted after a dispute with the Netherlands, which threatened to leave major car manufacturers without chips. The situation is amongst others being closely monitored at Volvo's factory in Ghent.

“We will conduct a comprehensive investigation into the actual situation of companies and will allow exceptions for deliveries that meet the criteria,” stated the Chinese Ministry of Commerce.

The resumption of exports is part of the agreement reached on Thursday by Chinese president Xi Jinping and US president Donald Trump, according to the Wall Street Journal, citing anonymous sources. Chinese and European officials also discussed the issue on Thursday in Brussels.

Nexperia is at the centre of a political conflict between China and the Netherlands. The chip manufacturer has its headquarters in the Dutch city of Nijmegen, but was taken over by a Chinese company in 2018. Dutch authorities however took control of Nexperia in September, to prevent technology and intellectual property from Nexperia's European division from leaking to China. Beijing believes that the Netherlands intervened unjustly and responded by halting Nexperia's chip exports from China.

As a result, numerous European industrial companies, and the automotive industry in particular, were at risk of running out of chip stocks in the short term. Europe's largest car manufacturer, Volkswagen, announced on Thursday that it still had Nexperia chips in stock “for a week”. Without those chips, production would come to a standstill.

Every European car contains 350 to 500 Nexperia chips, which are amongst others important for the functioning of windscreen wipers and side windows. Earlier, Volvo's factory in Ghent also announced that the “situation is being monitored continuously”.

^{Office of Nexperia © PHOTO Marcel van den Bergh / ANP}