The European Commission has reached an agreement with China’s Ministry of Commerce (MOFCOM) to restart the flow of semiconductors that had been disrupted by a crisis surrounding the company Nexperia. EU Trade Commissioner Maros Sefcovic said on social media that, effective immediately, exports of the company’s chips to the bloc for non-military uses will not be subject to Chinese licensing requirements. “My team and I have been in constant contact with the Chinese authorities, and welcome the confirmation provided to the European Commission by MOFCOM regarding the further simplification of export procedures for next-period chips destined for EU and global clients,” Sefcovic said. “MOFCOM will grant exemptions from licensing requirements to any exporter, provided that it is declared that the goods are intended for civilian use. Close engagement with both the Chinese and Dutch authorities continues as we work towards a lasting, stable, predictable framework that ensures the full restoration of semiconductor flows.”
Dutch-headquartered Nexperia was cut off from its Chinese processing facilities following a dispute between The Hague and Beijing, threatening to throw Europe’s automotive industry into disarray. Some 70% of the company’s chips – vital to car manufacturing – are processed and tested in China. After Beijing introduced its export controls, the European fabrication facilities under the Dutch chipmaker’s head office suspended the supply of wafers to its Chinese units in late October, exacerbating the supply chain crunch. The dispute started when Dutch authorities ousted the Chinese-owned company’s management on September 30, claiming that they had become aware of plans to move production of one of Europe’s premier chipmaking facilities to China. That move came a day before the company was due to be added to Washington’s “entity list” of companies restricted from doing trade with U.S. companies, citing national security concerns and invoking a law that had been sitting idle since 1952, the South China Morning Post reports.
