China’s Ministry of Commerce announced on Sunday that it will grant exemptions to export control measures on Nexperia chips intended for civilian applications, a move expected to ease supply shortages in the global automotive sector.

Nexperia, a Netherlands-based semiconductor manufacturer owned by Chinese company Wingtech Technology Co., produces a range of basic chips widely used in automotive electrical systems. The company’s chips are critical components in modern vehicles, powering systems such as sensors, engine controls, and infotainment units.

The latest decision follows a dispute that began on 30 September 2025, when the Dutch government took control of Nexperia under the Goods Availability Act. Dutch authorities cited concerns that Wingtech planned to relocate European production to China, posing a potential risk to European economic security. In response, China had restricted exports of Nexperia’s finished chips, most of which are packaged in China, threatening disruptions across the auto industry in Europe and Asia.

While China did not specify which applications qualify as “civilian use,” reports from German and Japanese companies indicate that deliveries of Chinese-made Nexperia chips have now resumed. The ministry emphasized that the exemptions align with China’s commitment to protecting global chip supply chains, while urging the European Union to encourage the Netherlands to reverse its takeover of the company.

The move is expected to provide relief for automakers that had been facing production delays due to chip shortages. Nexperia chips are a key part of supply chains for several European and Japanese car manufacturers. Analysts warn, however, that uncertainties remain as the Dutch government’s intervention continues to strain relations between China and the EU.

Adding to the complexity, Nexperia itself issued warnings in early November that it cannot guarantee the authenticity or quality of products manufactured in China since 13 October, following operational changes at its Chinese facilities. Despite these concerns, the company has reassured customers that its supply chain remains stable.

The Nexperia dispute reflects the growing intersection of geopolitics and the global semiconductor industry. The Dutch government’s intervention, aimed at safeguarding European economic interests, has prompted strong reactions from Beijing, which views the move as unjustified interference in a Chinese-owned company. China has repeatedly urged the EU to leverage its influence to resolve the dispute and ensure the free flow of chips critical to global manufacturing.

The exemption on exports is seen as a partial de-escalation, but experts caution that tensions may resurface if broader governance issues at Nexperia are not addressed. The situation highlights how national security concerns, corporate governance, and international trade policy can converge in high-tech supply chains.

Automakers and suppliers are cautiously optimistic that the easing of export restrictions will stabilize production in the short term. However, full resolution depends on the outcome of ongoing diplomatic discussions between China, the Netherlands, and the EU. Stakeholders in the automotive and semiconductor sectors continue to monitor the situation closely, as any renewed restrictions could quickly affect global supply chains. (ILKHA)