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China has said it will allow some Nexperia chips to be shipped out of the country as shortages of the critical products threaten to halt auto production around the world.
The Dutch government took control of the Netherlands-based chipmaker last month after the US expanded its export blacklist to ensnare the group, amid mounting governance concerns over its Chinese owner.
In retaliation, Beijing curtailed outbound shipments of Nexperia’s finished products, 80 per cent of which are processed in China.
China’s commerce ministry on Saturday invited companies facing difficulties because of the chip shortages to contact commerce officials.
“We will comprehensively consider the actual circumstances of the companies and grant exemptions to eligible exports,” a commerce spokesperson said, adding that the ministry would “fully consider the security and stability of domestic and international supply chains”.
The softening of Beijing’s position came days after US President Donald Trump and his Chinese counterpart Xi Jinping agreed to a one-year truce in their trade war at a summit in South Korea.
As part of the agreement, China will suspend sweeping export controls on rare earths in exchange for the US not rolling out the extensions of its technology export bans to subsidiaries of Chinese companies.
Chinese and EU officials also held talks in Brussels on Friday covering export controls including rare earths and Nexperia. A European Commission spokesperson said the EU welcomed China’s suspension of the rare earths controls as “an appropriate and responsible step”.
The Chinese announcement on Saturday marked a possible de-escalation in a spat that has cut off European, US and Japanese automakers from chips crucial to parts of the supply chain from airbags to lighting, threatening to halt production at big carmakers.
Nexperia was sold in 2017 to a Chinese consortium before being bought by Chinese company Wingtech. Last year, the US added Wingtech to commerce department blacklist.
The Dutch government seized control of the company in October citing “serious governance shortcomings”, causing a split between its Netherlands headquarters and China-based operations.
Nexperia’s semiconductor wafers are produced in Germany and the UK and then shipped to southern China for packaging and assembly before being distributed worldwide.
Volvo Cars and Volkswagen last week warned of temporary plant shutdowns in Europe if the stand-off was not resolved. Ford chief executive Jim Farley has also said that the US government was trying to resolve the dispute.
The Chinese commerce ministry statement said the Dutch government’s “inappropriate interference in the company’s internal affairs has led to the current chaos in the global supply chain”.
Wingtech did not immediately respond to a request for comment.
The Dutch governance concerns at Nexperia stem from Wingtech controlling shareholder Zhang Xuezheng’s move to build a new semiconductor factory in Shanghai, which was outside of the control of both Nexperia and Wingtech. Documents show he forced Nexperia to place large orders from the factory, which the company said it did not need.
Zhang was removed from his role as chief executive of Nexperia after the Dutch government seized management control.
Wingtech last week told the Financial Times that the move was in its view an attempt to pave the way for a Dutch company to take over.
It added that Nexperia faced an “existential threat” as a result of the feud, with hundreds of global jobs at risk and that “any Nexperia-successor company is doomed to fail”.
Additional reporting by Alice Hancock in Brussels
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