In a significant policy shift, China has announced plans to relax its ban on chip exports, a measure initially imposed in response to the Netherlands’ takeover of Nexperia, a Chinese-owned semiconductor manufacturer based in the Netherlands. The Dutch government invoked a Cold War-era law in September to seize control of the company, citing ‘serious governance shortcomings’ and concerns over chip availability during emergencies. This move prompted China to halt the re-export of completed Nexperia chips to Europe, sparking alarm among automotive manufacturers, who rely heavily on these components. Approximately 70% of chips produced in the Netherlands are sent to China for final processing before being re-exported globally. In a statement released on Saturday, China indicated it would ‘comprehensively consider the actual situation of enterprises and grant exemptions to exports that meet the criteria,’ though specific details remain unclear. Beijing also criticized the Dutch government for ‘improper interference in the internal affairs of enterprises,’ attributing the disruption of global supply chains to these actions. Nexperia, now under Dutch control, has informed customers it will cease sending chips to China for processing, according to a recent letter obtained by Reuters. The European Automobile Manufacturers’ Association (ACEA) had previously warned that Nexperia chip supplies would dwindle within weeks unless the Chinese ban was lifted, potentially halting vehicle production. The decision to ease export controls follows a meeting between US President Donald Trump and Chinese President Xi Jinping in South Korea, where semiconductor trade was reportedly discussed. The White House is expected to release a fact sheet detailing a new trade agreement with China, including the resumption of Nexperia exports. This development comes amid broader geopolitical tensions, including the US government’s 2024 decision to place Chinese chipmaker Wingtech on its ‘entity list’ over national security concerns. In the UK, Nexperia was compelled to sell its Newport silicon chip plant due to similar security apprehensions, though it retains a facility in Stockport.