The Nexperia crisis is entering an easing phase. China has said it will grant case-by-case exemptions from its ban on Nexperia chip exports. This could offer a lifeline to automakers scrambling to secure supplies. In the meantime, industry leaders warn that recovery from the disruption could take months.
The Ministry of Commerce said eligible firms could apply for exemptions allowing the shipment of Nexperia’s chips from China. The announcement marks the first sign of relief since the restrictions cut off one of the key components for automakers in the West.
Tensions have been growing after the Netherlands took control of Nexperia under emergency powers, citing national security concerns. The new official stance seems to signal that no party is interested in a steep escalation.
“Searching the globe”
Executives welcomed Beijing’s signals of flexibility but said supply chains remain fragile. “We are covered for the short term, but this is not a sustainable situation,” Mercedes CEO Ola Källenius told the press, adding that companies are “searching the globe” for alternative chip sources. It shows how the auto industry remains very dependent on a single low-cost supplier, despite the post-pandemic semiconductor crisis.
The move has already rippled across the industry. Honda halted operations in North America, while suppliers such as Germany’s ZF Friedrichshafen slowed output at its Schweinfurt plant, where it builds electric drivetrains for major automakers. Others, including Mercedes-Benz and Nissan, are assessing stock levels as inventories dwindle.
Internal rows
Inside Nexperia, divisions between its Dutch headquarters and Chinese subsidiary remain complicated. The Netherlands-based management suspended wafer deliveries to the Dongguan assembly plant, citing unpaid obligations.
Nexperia China denounced the move as “misleading” and insisted its warehouses held enough stock to fulfill orders through year-end. The subsidiary has begun qualifying new wafer suppliers to reduce reliance on the Netherlands.
Clearly, these internal rows reflect the broader geopolitical struggle between Europe and China over technological control. Beijing accuses the Dutch government of unlawful interference, claiming its seizure of Nexperia created “chaos in global production.”
No timing yet
While the Commerce Ministry’s exemption offer appears to soften China’s stance, it currently leaves open the timing and conditions for resuming shipments. “We will consider the actual circumstances of enterprises and grant exemptions to eligible exports,” the ministry said, without detailing criteria or timing.
European governments are also pressing for clarity. German officials have urged Brussels to formulate a proper response. They warn that production stoppages could hit Europe’s auto sector within weeks if supply flows are not restored.
For now, automakers are carefully assessing their existing inventories and are revising production schedules. In modern-day car manufacturing, it has become commonplace that even the smallest chip can bring the largest factory to a halt.
