China Exempts Chips Used by Carmakers from Export Curbs
China has recently lifted export controls on essential computer chips vital for car production, according to the country’s commerce ministry. This decision aims to support carmakers who were apprehensive about production disruptions in Europe.
Key Developments:
– Exemptions for Nexperia: The exemptions specifically target exports made by Nexperia, a Chinese-owned company, for civilian use. This is a significant move to alleviate concerns within the automotive industry.
– Easing Trade Tensions: In tandem with this exemption, China has paused an export ban to the United States on critical semiconductor materials and suspended port fees for American vessels. These actions signal a reduction in trade tensions between Beijing and Washington.
– Background Context: Last October, a diplomatic rift occurred when the Dutch government assumed control of Nexperia due to “serious governance shortcomings.” The goal was to protect the supply of semiconductors crucial for cars and other industries, leading China to block exports of the firm’s finished chips.
– Concerns Over Supply Chain: The European Automobile Manufacturers’ Association (EMEA) warned that without intervention, Nexperia chip supplies would only last weeks. This situation raised alarms as Volvo Cars, Volkswagen, and Jaguar Land Rover expressed the risk of operational shutdowns due to the chip shortage.
Recent Statements and Actions:
– EU and China Collaboration: EU Trade Commissioner Maros Sefcovic confirmed via social media that China has agreed to simplify export procedures for Nexperia chips. The new policy allows exemption from licensing requirements for any exporter as long as the products are intended for civilian use.
– Call for Action: In its statement, China urged the EU to influence the Netherlands to rectify its erroneous practices.
– Future Considerations: Professor David Bailey from Birmingham University pointed out that China’s swift and severe retaliation serves as a wake-up call for the automotive sector, stressing the importance of alternative processing sites and larger product stocks to mitigate future shortages.
Additional Measures:
– Suspension of Export Bans: The suspension of a ban on dual-use items like gallium and germanium took effect on Sunday and will remain valid until November 27, 2026.
– Port Fee Suspension: China’s transport ministry has opted to exempt US-linked ships from port fees for a whole year, effective from 0501 GMT on Monday.
As the industry navigates these changes, the recent adjustments exemplify the complexities of the global semiconductor market and its direct impact on the automotive sector. The measures taken by China could herald a new chapter in international trade dynamics, particularly concerning the availability of chips used by carmakers.