China grants exemptions to export curbs on Nexperia chips for civilian use

By Eduardo Baptista

BEIJING (Reuters) -China has granted exemptions to export controls on Nexperia chips for civilian applications, the commerce ministry said on Sunday in a move that will help to relieve supply shortages for carmakers and automotive suppliers. 

The announcement is the strongest signal yet from Beijing that it will ease pressure on the global auto industry caused by export curbs imposed after the Dutch government took control of Nexperia, a large manufacturer of basic chips used in automotive electrical systems. 

Nexperia is based in the Netherlands but owned by Chinese company Wingtech.

China's commerce ministry did not specify what it considered to be civilian use, but its announcement follows statements from German and Japanese companies saying that deliveries of Nexperia's Chinese-made chips had resumed.

Nevertheless, bilateral ties between China and the Netherlands, and by extension the European Union, are likely to remain strained until the dispute over Nexperia's ownership and operations is resolved.

The Dutch government took control of Nexperia on September 30, saying that Wingtech was planning to move the company's European production to China and that this would pose a threat to European economic security.

China responded by cutting off exports of the company's finished chips, which are mostly packaged in China, though it said last week that it would begin accepting applications for exemptions after a meeting between U.S. President Donald Trump and Chinese President Xi Jinping on October 30.

China's commerce ministry has repeatedly said it was protecting global chip supply chains while the Netherlands was failing to take action to resolve the dispute. 

The ministry's statement on Sunday said that China hoped the EU would "further intensify" efforts to urge the Dutch side to revoke its seizure of Nexperia.

"China welcomes the EU to continue leveraging its influence to urge the Netherlands to promptly rectify its erroneous actions," the ministry added.

(Reporting by Eduardo BaptistaAdditional reporting by Ethan Wang, Kevin Yao and Shuyan WangEditing by Alison Williams and David Goodman)