China has lifted export restrictions on certain computer chips used heavily in vehicle manufacturing, in a move expected to ease recent concerns over supply disruptions in Europe’s auto industry.
The country’s Ministry of Commerce announced that Chinese-owned semiconductor manufacturer Nexperia has been granted exemptions allowing its chips to be exported for civilian use. The decision is expected to provide relief to carmakers who warned that ongoing restrictions could force temporary plant shutdowns.
At the same time, China has also suspended an export ban on several key materials used in semiconductor production bound for the United States. The move comes following understandings reached after talks between President Xi Jinping and U.S. President Donald Trump in October, where both sides agreed to roll back tariffs and pause further trade restrictions for a year.
Background to the Dispute
Nexperia, though headquartered in the Netherlands, is owned by Chinese firm Wingtech. In October, the Dutch government assumed control of the company, citing concerns about secure semiconductor supply during emergencies. China responded by blocking the export of Nexperia’s finished chips, raising fears of a new supply chain shock in the automobile sector.
The European Automobile Manufacturers’ Association (EMEA) had warned supplies could run out within weeks if the restrictions persisted. Major automakers including Volvo Cars, Volkswagen and Jaguar Land Rover said shortages could disrupt production.
Steps Toward Normalisation
EU trade commissioner Maros Sefcovic confirmed on Saturday that China will now simplify export procedures for Nexperia chips and remove licensing requirements for goods destined for civilian use.
He said the EU will continue working with China and the Netherlands to ensure a stable and predictable semiconductor supply framework.
China’s Ministry of Commerce, meanwhile, called on the EU to encourage the Netherlands to reverse what it described as earlier “erroneous practices”.
Suspension of Additional Export Controls
China has also paused a ban on exports to the U.S. of certain “dual-use” materials such as gallium, germanium, antimony and super-hard industrial compounds. These materials are widely used in chipmaking and advanced electronics. The suspension will remain in effect until November 27, 2026.
In a related move, China has also halted newly expanded export controls on some rare earth materials and lithium batteries.
