Chips

China has lifted export restrictions on computer chips used heavily in vehicle manufacturing and suspended bans on key semiconductor materials bound for the United States, moves expected to ease supply disruptions affecting Europe’s automotive industry. The announcements follow talks between President Xi Jinping and United States President Donald Trump in late October.

China’s Ministry of Commerce announced Sunday that Chinese owned semiconductor manufacturer Nexperia has been granted exemptions allowing its chips to be exported for civilian use. The decision provides relief to carmakers who warned that ongoing restrictions could force temporary plant shutdowns across Europe.

The ministry simultaneously suspended export bans on gallium, germanium, antimony and super hard materials destined for the United States. These dual use materials are widely utilized in semiconductor production and advanced electronics manufacturing. The suspension takes effect immediately and will remain in place until November 27, 2026.

Nexperia, headquartered in the Netherlands but owned by Chinese firm Wingtech Technology, produces high volume semiconductors including transistors, diodes and voltage regulators that are essential for automotive electrical systems. The company supplies approximately 40 percent of automotive chips in this market segment, according to research firm TechInsights.

The Dutch government assumed control of Nexperia on September 30, 2025, invoking the Goods Availability Act citing concerns that Wingtech planned to relocate European production to China. The government said this would pose threats to European economic security. China responded by blocking exports of Nexperia’s finished chips, which are mostly packaged in China before being shipped to European customers.

The European Automobile Manufacturers’ Association (ACEA) warned in October that chip inventories could run out within weeks if restrictions persisted. Major automakers including Volvo Cars, Volkswagen and Jaguar Land Rover said shortages could disrupt production lines. ACEA Director General Sigrid de Vries warned last week that assembly line stoppages might only be days away.

European Union trade commissioner Maroš Šefčovič confirmed Saturday that China will now simplify export procedures for Nexperia chips and remove licensing requirements for goods destined for civilian use. He said the European Union will continue working with China and the Netherlands to ensure a stable and predictable semiconductor supply framework.

Philipp von Hirschheydt, chief executive officer of German automotive supplier Aumovio, confirmed his company received an export exemption and has resumed shipping Nexperia semiconductors. Aumovio, recently spun off from Continental, employs more than 86,000 people globally and supplies components to BMW, Volkswagen and Stellantis. Von Hirschheydt cautioned that normalizing all processes and procedures will take time, with potential supply problems continuing for four to six weeks.

China’s Ministry of Commerce called on the European Union to encourage the Netherlands to reverse what it described as earlier erroneous practices. The ministry said it was protecting global chip supply chains while the Netherlands was failing to take action to resolve the dispute.

The breakthrough emerged from a meeting between Xi and Trump on October 30 at a military base adjacent to Busan’s international airport in South Korea. The session lasted approximately one hour and 40 minutes, with the Nexperia chip resumption forming part of a broader trade and economic agreement between the world’s two largest economies.

The agreement also addressed fentanyl precursor chemicals, rare earth export controls and agricultural trade. Both sides agreed to roll back tariffs and pause further trade restrictions for one year, according to statements from the White House.

China suspended bans on exports to the United States of gallium, germanium, antimony and super hard industrial compounds on Sunday. These materials are critical for chipmaking, with gallium and germanium used in semiconductor fabrication and 5G components, while antimony is utilized in energy storage, electronics and military alloys.

China controls over 90 percent of global gallium supply and holds dominant positions in germanium and antimony production. The export ban, introduced in December 2024, was viewed as Beijing’s retaliatory measure against Washington’s restrictions on China’s access to advanced semiconductors and chipmaking equipment.

Prices for gallium and germanium spiked by more than 300 percent in early 2025 following the ban, prompting governments in the United States, Japan and the European Union to accelerate efforts to diversify supply chains. Futures for both materials dropped nearly 15 percent on the Shanghai Metals Exchange following Sunday’s announcement.

China announced Friday the suspension of other export controls imposed October 9, including expanded restrictions on certain rare earth materials and lithium battery materials. European Commissioner for Trade Šefčovič confirmed Saturday that the suspension applies also to European Union industries.

ACEA acknowledged China’s announcement as positive but emphasized that critical uncertainties persist. The association stated that several practical questions remain regarding how exemptions for export controls will be granted. Until the secure flow of goods begins again, the situation will remain critical, according to ACEA.

Dutch Economic Affairs Minister Vincent Karremans welcomed news that China was resuming exports of Nexperia chips from China to Europe. However, his statement made no mention of relinquishing government control over the firm. The Netherlands will closely monitor and support these developments and will take appropriate steps where necessary, Karremans said.

The ban on exports to United States military users or for military end uses remains in effect, according to the Chinese Ministry of Commerce. The temporary suspension announced Sunday applies only to civilian applications and commercial use.

Bilateral relations between China and the Netherlands, and by extension the European Union, are likely to remain strained until the dispute over Nexperia’s ownership and operations is fully resolved. However, the recent announcements represent a significant de escalation in trade tensions that threatened to disrupt global automotive supply chains.

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