U.S. expected to announce restart of Nexperia’s China shipments, source says

The White House plans to announce that Dutch chipmaker Nexperia’s facilities in China will resume shipments — a move that would bring relief to automakers worldwide who have been bracing for potential production shutdowns, a source said.

Earlier this month, the Dutch government took control of Nexperia, which is owned by Chinese company Wingtech (600745.SS). Following the move, Beijing blocked the export of Nexperia products from China.

Nexperia manufactures large volumes of semiconductors in the Netherlands, used extensively in automobiles and consumer electronics. Roughly 70% of the chips produced there are packaged in China before being sold to global distributors.

China’s Commerce Ministry confirmed the report in a statement, saying it would consider granting exemptions for Nexperia chip exports from the country.

“As a responsible major nation, China fully considers the security and stability of both domestic and international production and supply chains,” the ministry said. It added that companies struggling to obtain components should contact Chinese authorities: “We will assess each case based on its circumstances and allow eligible exports.”

The White House did not immediately respond to a request for comment. It is expected to release a fact sheet soon with details of a new U.S.-China trade understanding, which includes Nexperia and was reached this week during a summit between President Donald Trump and Chinese President Xi Jinping in South Korea.

Nexperia produces low-cost, basic power control chips such as transistors and diodes, which cost only a few cents but are essential to nearly every device that uses electricity.

In automobiles, these chips are used to connect batteries to motors, power lights and sensors, manage braking systems and airbags, and operate entertainment consoles and electric windows.

Automakers have warned the White House that without a steady supply of these components, major portions of U.S. vehicle production could be halted within weeks.

Honda (7267.T) said Tuesday it had suspended operations at a plant in Mexico and begun adjusting production in the U.S. and Canada.

Reuters reported Friday that, according to a letter sent to customers, Nexperia had halted wafer shipments to its assembly plants in China, raising concerns about further supply disruptions.

Court filings revealed that the Dutch government’s seizure of Nexperia followed increasing U.S. pressure after Wingtech was placed on a restricted export list, although Dutch officials said the move stemmed from governance issues.

Industry groups have sounded the alarm about potential impacts on production. On Thursday, Stellantis (STLAM.MI), maker of Jeep SUVs, said it had established a “war room” to monitor the situation. Japanese automaker Nissan (7201.T) said it had enough chips to maintain operations through the first week of November without interruption.