The European Commission Executive Vice-President for Trade and Economic Security, Maroš Šefčovič, declared on social media platform X on November 8th local time that China has consented to resume exporting Nexperia semiconductor chips, as long as buyers promise to use the chips only for civilian purposes. The worldwide semiconductor supply chain crisis that had persisted for more than a month reached a turning point when this step went into effect right away.
During his attendance at a climate summit in Brazil the previous day, Dutch Prime Minister Dick Schoof disclosed that China had notified the Netherlands that Nexperia would be permitted to continue supplying chips to the Netherlands from its Chinese plants. China’s Ministry of Commerce replied on November 8th that China has taken proactive steps to provide exemptions for compliance shipments meant for civilian use, demonstrating a responsible attitude toward the security and stability of the global semiconductor supply chain.
The global automotive sector is experiencing a scarcity of chips. On September 30, the Dutch government used the Supply of Goods Act to temporarily seize control of Nexperia, a Chinese company, and freeze the assets and intellectual property of its 30 international companies. This marked the beginning of this crisis. China responded by placing stringent restrictions on chip shipments from Nexperia’s Chinese plants.
With a market share of more than 30%, Nexperia is one of the top suppliers of automotive-grade power semiconductors worldwide. Major international manufacturers like Honda are experiencing chip shortages as a result of export restrictions, since over 80% of its finished goods are packaged and tested in China. The end of October saw the release of Volkswagen’s third-quarter financial report, which revealed the company’s first quarterly deficit in five years. European automakers may experience production difficulties in the next weeks if supplies cannot be restored, the European Automobile Manufacturers Association said.
Export exemptions are granted to the first group of suppliers. On November 7, Orantech, a German supplier of auto parts, announced that it had received an export license from the Chinese government and that Nexperia semiconductor chips and associated parts were once again being shipped. At the third-quarter earnings presentation, Philipp von Hirschheydt, CEO of Orantech, said: “We applied for and received an exemption from export restrictions, received verbal notification the day before yesterday, and obtained the written document yesterday.”
Along with Orantech, Honda Motor also reported that it has obtained pertinent information regarding the restart of shipments from the Chinese side. The Bosch Group in Germany has also started importing Nexperia chips from China, according to people with knowledge of the situation. In order to guarantee the complete restoration of semiconductor supply, Šefčovič said the EU is keeping in regular contact with the appropriate departments in China and the Netherlands in the hopes of reaching a “lasting and stable” consensus framework.
Nonetheless, the Dutch government’s legal actions against Wingtech Technology founder Zhang Xuezheng are still pending, and the parties’ disagreements on corporate ownership remain unresolved.