China's Easing on Chip Supply Brings Relief to Worldwide Automotive Industry

China Eases Chip Export Restrictions Following Dispute with the Netherlands

Beijing has indicated a partial relaxation of its export controls on Nexperia, a Dutch chipmaker at the heart of a diplomatic clash with the Netherlands, as negotiations to resolve the issue gain momentum,

. This development comes after tensions escalated when the Dutch authorities took over Nexperia in October 2025 due to concerns about its management, leading China to halt shipments of the company's chips from its Chinese plants, . Chinese officials stated that the easing of these measures is intended to "fully take into account the real conditions of businesses," while also criticizing what they called Dutch "inappropriate intervention" in company affairs, the BBC reported.

The conflict has had a significant impact on the global car industry, as Nexperia’s chips are essential for automotive electronics. European automakers such as Nissan, Mercedes-Benz, and

, have cautioned that production stoppages are imminent, . Nissan’s Chief Performance Officer Guillaume Cartier said there is little clarity beyond early November, while Mercedes-Benz CEO Ola Källenius stressed the importance of finding global supply alternatives. In Brazil, a key automotive market, officials warned that factories could be forced to close within weeks if the situation is not resolved.

The Dutch government’s action, which involved invoking an old Cold War law to seize control of Nexperia, was driven by fears that its Chinese owner, Wingtech, intended to move technology and reduce European operations,

. Former Nexperia CEO Zhang Xuezheng, who also founded Wingtech, was accused of transferring confidential information and equipment from Europe to China. In response, Beijing imposed export limits, disrupting 70% of Nexperia’s chips made in China for global markets, the BBC also noted.

The European Automobile Manufacturers’ Association (ACEA) has raised concerns, warning that industry stockpiles are running low and that production lines could halt within days, EU News reported. ACEA’s Director General, Sigrid de Vries, called for "immediate diplomatic action" to prevent a crisis that could affect the worldwide auto industry. The European Commission has been mediating between China and the Netherlands, with Trade Commissioner Maroš Šefčovič working to ease the standoff.

Recent signs point to progress, as China’s move to relax the ban comes alongside high-level diplomatic talks, including a Trump-Xi meeting in South Korea, the BBC reported. Although Beijing has not detailed the scope of its exemptions, the White House suggested a trade deal may be in the works that would allow Nexperia to resume exports. The U.S. had previously labeled Wingtech a national security risk, further complicating trans-Pacific relations,

.

Industry reactions underscore the delicate nature of global supply networks. Bosch, Continental, and DENSO are reviewing their inventories and exploring alternatives, though standard Nexperia chips can generally be replaced by those from other manufacturers, the Ioplus analysis added.

has set up a "crisis room" to track chip supplies daily, while Honda has already made production adjustments in North America, .

The Nexperia situation highlights how vulnerable the automotive sector is to international tensions. As carmakers rush to secure components and diversify suppliers, the episode strengthens calls for more robust supply chain strategies amid intensifying U.S.-China trade disputes, the Ioplus analysis concluded.