US to announce Nexperia chip shipments from China to resume
[WASHINGTON] The US is set to announce that Nexperia, a Dutch semiconductor company with facilities in China, will resume shipping chips, according to a person familiar with the matter, following a trade pact agreed to by US President Donald Trump and China’s President Xi Jinping at their summit this week.
The Trump administration is expected to detail the move in a fact sheet being prepared on the US-China trade deal, the person said, speaking on condition of anonymity to discuss a matter not yet public. News of the agreement on Nexperia was first reported by The Wall Street Journal.
The move is likely to ease worries about chip shipments that had threatened auto production in Europe and elsewhere amid a broader trade fight pitting China against the US and its allies that had roiled markets.
Beijing this month blocked Nexperia, a key supplier of chips used by the automotive and consumer electronics industries, from exporting from its facilities in China. The move was in response to the Dutch government seizing control of the Chinese-owned chipmaker and highlighted worsening trade relations between China and the West.
Carmakers around the world have been bracing for production cuts or all-out stoppages as a consequence of the export freeze. Europe’s auto industry has been working around the clock to prevent the conflict from triggering production outages, and suppliers have been reining in production of components for major automakers such as Volkswagen and BMW.
Last week, the largest vehicle supplier association in the US warned that the American auto industry was two-to-four weeks away from production stoppages, and Ford Motor’s chief executive called it an “industry-wide issue” in need of a political solution.
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The framework to resume chip shipments will be detailed in a fact sheet from the administration highlighting the terms of the trade agreement secured by Trump and Xi at their summit in South Korea.
That pact, following their first face-to-face meeting since 2019, saw China agree to delay sweeping controls on rare-earth magnets and resume purchases of American soybeans and other agricultural products. The US in turn pledged to halve a fentanyl-related tariff on China and to hold-off on a threatened 100 per cent levy on Chinese goods Trump threatened to impose starting in November. The US is also pausing some reciprocal tariffs on Beijing for an additional year.
The standoff over Nexperia appeared to escalate earlier Friday (Oct 31), when the company halted supplies to its China factory over disagreements with the site’s management, escalating a standoff that’s already impacting automotive production in Europe and beyond.
The Dutch manufacturer provides high volumes of transistors and logic chips that are used across the automotive and consumer electronics industries. It operates wafer fabrication plants in Germany and the UK. Aside from the assembly and testing site in China, it also has facilities in the Philippines and Malaysia.
Semiconductors have held an outsized importance in the trade fight between the US and China with Trump looking to restrict Chinese access to advanced chips in a race between the countries for technological supremacy in artificial intelligence and other fields. Beijing in turn has used their dominance in rare-earth production as a bargaining chip, threatening to curb access to minerals necessary for high-tech manufacturing of widely used consumer products. BLOOMBERG
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