China has lifted export restrictions on computer chips essential for car manufacturing, the country’s commerce ministry announced on Sunday. The move allows Chinese-owned Nexperia to resume exporting chips for civilian use, providing relief to European carmakers who had warned of imminent production disruptions.
The decision comes after the Dutch government took control of Nexperia in October, citing governance issues and the need to secure the European semiconductor supply. Nexperia, headquartered in the Netherlands but owned by Chinese company Wingtech, had about 70% of its European-made chips shipped to China for completion before being re-exported globally. Beijing responded to Dutch oversight by blocking exports of the firm’s chips, raising concerns over supply shortages for carmakers.
The European Automobile Manufacturers’ Association had warned that Nexperia’s stock of chips would last only a few weeks without a resolution. Volvo Cars, Volkswagen, and Jaguar Land Rover all highlighted the potential for temporary factory shutdowns if the ban continued. EU trade commissioner Maroš Šefčovič announced on Saturday that China had agreed to simplify export procedures for Nexperia chips and grant exemptions from licensing requirements for civilian goods. He emphasized that close engagement with Chinese and Dutch authorities is ongoing to create a “lasting, stable, predictable framework” to restore semiconductor flows.
China’s commerce ministry called on the EU to continue exerting influence on the Netherlands to correct what it described as “erroneous practices.” The ministry stated that the exemptions for civilian-use chips would ease pressure on global supply chains while allowing European carmakers to resume production without interruption.
Professor David Bailey from Birmingham University said the developments serve as a “wake-up call” for the motor industry. He noted that while the Dutch government may have had valid reasons to intervene at Nexperia, it did not fully anticipate the consequences. Bailey suggested that the industry should consider alternative processing locations in Southeast Asia or Europe and maintain larger inventories to guard against future shortages.
In addition to lifting chip restrictions, China has paused its export ban on materials critical to the semiconductor industry, including gallium, germanium, antimony, and other dual-use items shipped to the United States. The suspension, effective Sunday, will remain in place until November 27, 2026. China also suspended port fees for US-linked vessels for one year.
The measures follow earlier announcements by Beijing in November that eased curbs on rare earth materials and lithium battery exports. Analysts say these steps signal a broader effort to ease trade tensions with both the EU and the US, following discussions between President Xi Jinping and US President Donald Trump in October aimed at reducing tariffs and pausing other trade restrictions for one year.
The lifting of export controls on Nexperia chips is expected to stabilise global automotive production and reduce immediate supply chain pressures, allowing manufacturers to plan with greater certainty for the months ahead.
