China's Chip Thaw Offers Lifeline to Global Auto Sector

China Loosens Chip Export Ban After Netherlands Dispute

Beijing has signaled a partial easing of its export restrictions on Nexperia, a Dutch semiconductor firm at the center of a geopolitical standoff with the Netherlands, as diplomatic efforts to resolve the crisis intensify, a BBC report. The move follows heightened tensions sparked by the Dutch government's seizure of Nexperia in October 2025 over governance concerns, which prompted China to block exports of the company's chips from its manufacturing facilities, a Bloomberg report. The relaxation of restrictions, announced by Chinese authorities, aims to "comprehensively consider the actual situation of enterprises" while criticizing Dutch "improper interference" in corporate operations, the BBC said.

The dispute has sent shockwaves through the global automotive industry, with Nexperia's chips integral to vehicle electronics systems. European carmakers, including Nissan, Mercedes-Benz, and Honda, have warned of imminent production halts, a MarketScreener report said. Nissan's Chief Performance Officer Guillaume Cartier acknowledged limited visibility beyond early November, while Mercedes-Benz CEO Ola Källenius emphasized the need for global alternatives. In Brazil, a major automotive hub, officials cautioned that factory shutdowns could occur within weeks if the crisis persists.

The Dutch government's intervention, invoking a Cold War-era law to take control of Nexperia, stemmed from concerns that its Chinese parent company, Wingtech, planned to transfer technology and cut European operations, an EU News article reported. Former Nexperia CEO Zhang Xuezheng, also Wingtech's founder, faced allegations of shifting trade secrets and equipment from European sites to China. Beijing retaliated with export restrictions, disrupting 70% of Nexperia's chips processed in China for global distribution, the BBC also reported.

The European Automobile Manufacturers' Association (ACEA) has sounded the alarm, stating that industry reserves are dwindling and that production stoppages could occur within days, the EU News article said. Sigrid de Vries, ACEA's Director General, urged "urgent diplomatic solutions" to avert a crisis that could ripple across the global auto sector. The European Commission has meditated between the Netherlands and China, with Trade Commissioner Maroš Šefčovič engaging both sides to de-escalate tensions.

Recent developments suggest progress, as China's decision to loosen the ban coincides with high-level diplomatic engagements, including a Trump-Xi summit in South Korea, the BBC reported. While Beijing did not specify the terms of its exemptions, the White House hinted at a trade agreement that could include resuming Nexperia exports. The U.S. had previously designated Wingtech a national security threat, adding another layer to the cross-Pacific tensions, an Ioplus analysis.

Industry responses highlight the fragility of global supply chains. Bosch, Continental, and DENSO are assessing inventories and seeking alternatives, though standard Nexperia chips remain interchangeable with components from other suppliers, the Ioplus analysis added. Stellantis has established a "war room" to monitor daily chip availability, while Honda has already adjusted production in North America, a Coinotag report.

The Nexperia crisis underscores the automotive industry's vulnerability to geopolitical rifts. As automakers scramble to secure supplies and diversify sources, the incident reinforces calls for resilient supply chain strategies amid escalating U.S.-China trade rivalries, the Ioplus analysis noted.