Nexperia Automotive Chip Crisis Current Status

Netherlands-based semiconductor maker Nexperia is at the center of a standoff between the European Union, the United States and China that has caused a near-crisis for global automakers.

In October, the Dutch government took control of Nexperia, a subsidiary of Chinese company Wingtech, citing national security concerns. In response to this move, the Chinese government blocked the flow of Nexperia products into China.

Chinese and U.S. authorities appear to be clearing the way for Nexperia’s China-based operations to resume exports of vital automotive chips, as a meeting was held in Europe on Saturday to try to calm the growing problem.

However, for now, the auto industry’s supply chain remains unstable.

The conflict has threatened car production around the world, with automakers warning of impending shortages of chipmakers’ parts that are essential to a car’s basic electrical functions and difficult to replace on short notice.

The battle comes amid increased scrutiny of China-linked tech companies by Western governments, including the United States, which recently tightened export control rules to restrict technology transfers to Chinese-owned companies.

Nexperia’s owner, Wingtech, was placed on the US blacklist in December 2024 for “supporting the Chinese government’s efforts to acquire companies with sensitive semiconductor manufacturing capabilities.”

Here’s what you need to know about the current state of the conflict and why it matters.

Nexperia manufactures billions of so-called foundation chips (transistors, diodes, power management components) that are produced in Europe, assembled and tested in China, and re-exported to customers in Europe and elsewhere. Approximately 70% of chips manufactured in the Netherlands are sent to China to be completed and re-exported to other countries.

This chip is basic and inexpensive, but it is needed in almost every device that uses electricity. In cars, these chips are used to connect batteries to motors, lights and sensors, braking systems, airbag controllers, entertainment systems, and electric windows.

Nexperia had sales of $2 billion last year.

Late October, automakers, etc. volkswagenNissan Motor Co. and Mercedes-Benz Motors Co. have warned that production could be cut if NExperia’s chip exports are suppressed for an extended period.

Automakers typically have some inventory and alternative suppliers, but it’s difficult to switch sources overnight.

In September, the Dutch government invoked a Cold War-era law to effectively take control of Nexperia over concerns that its Chinese owners planned to transfer intellectual property to another company it owned. A Dutch court also suspended Nexperia CEO and Wingtech founder Zhang Xuezhen for mismanagement.

The Chinese government retaliated weeks later by imposing export restrictions on certain Chinese-made Nexperia products, escalating tensions and raising concerns about broader supply chain shocks. As a result, the company has informed automakers that it can no longer guarantee supply.

However, signs of a breakthrough are beginning to appear.

On Friday, a report said, citing sources, that the United States plans to announce that Nexperia will resume sending chips under a framework agreement reached during a meeting between President Donald Trump and Chinese President Xi Jinping. And on Saturday, China announced it would exempt some Nexperia chips from the export ban. Chinese authorities have not made clear what these exemptions mean.

In a statement, China’s Ministry of Commerce said, “We will comprehensively consider the actual situation of the company and exempt the targeted exports.”

If the exemption is finalized, it could ease immediate pressure on automakers. But broader disputes over ownership, technology control, and security oversight remain unresolved.