chips

China has lifted export controls on computer chips vital to car production, the country’s commerce ministry said on Sunday.

Exemptions have been granted to exports made by Chinese-owned Nexperia for civilian use, it said, which should help carmakers who had feared production in Europe would be hit.

At the same time, China has also paused an export ban to the US of some materials that are crucial in the semiconductor industry and suspended port fees for American ships.

The moves mark an easing of trade tensions between Beijing and Washington after President Xi Jinping and his US counterpart Donald Trump agreed in October to reduce tariffs on each other and pause other measures for a year.

In October, the Dutch government took control of Nexperia, which is based in the Netherlands but owned by Chinese company Wingtech, to try to safeguard the European supply of semiconductors for cars and other goods.

In response, China blocked exports of the firm’s finished chips. However, it said earlier this month it would begin easing the ban as part of a trade deal struck between the US and China.

While Nexperia is based in the Netherlands, about 70% of its chips made in Europe are sent to China to be completed and re-exported to other countries.

When it took control of the company, the Dutch government said it had taken the decision due to “serious governance shortcomings” and to prevent the company’s chips from becoming unavailable in an emergency.

But when China blocked exports of chips from Nexperia, there were worries that it could create global supply chain issues.

In October, the European Automobile Manufacturers’ Association (EMEA) had warned Nexperia chip supplies would only last a few weeks unless the Chinese ban was lifted.

Earlier this month, the EMEA’s director general Sigrid De Vries told the BBC that “supply shortages were imminent”.

Volvo Cars and Volkswagen had warned that a chip shortage could lead to temporary shutdowns at their plants, and Jaguar Land Rover also said the lack of chips posed a threat to its business.

But on Saturday, EU trade commissioner Maros Sefcovic announced in a post on X that China had agreed to “the further simplification of export procedures for Nexperia chips” and it would “grant exemption from licensing requirements to any exporter” provided the goods were for “civilian use”.

“Close engagement with both the Chinese and Dutch authorities continues as we work towards a lasting. stable predictable framework that ensures the full restoration of semiconductor flows.”

In its statement, China’s commerce ministry called on “the EU to continue exerting its influence to urge the Netherlands to correct its erroneous practices as soon as possible.”

Prof David Bailey from Birmingham University’s business school told the BBC’s Today programme that the actions of China were a “wake-up call” for the motor industry.

“The Dutch government may well have had good reasons to try and take control but it hadn’t thought through the implications of that,” he said. “The retaliation from China was swift and it was brutal.”

He said there was a need to find alternative processing sites, “maybe in south east Asia, or Europe”, and for the industry to keep bigger stocks of its products in case of shortages.

Meanwhile, the suspension of a ban on exports of “dual-use items” related to gallium, germanium, antimony and super-hard materials to the US came into effect on Sunday and will be in place until 27 November, 2026.

The ban on the exports of goods and materials that can have both civilian and military uses was announced in December 2024.

China’s transport ministry also said port fees charged on US-linked ships would be suspended for a for a year, effective 0501 GMT Monday.

On Friday, China also announced the suspension of other export controls related to expanded curbs on some rare earth materials and lithium batteries.