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China has announced that it will exempt some Nexperia chips from an export ban. The decision comes after a dispute with Dutch officials and has been a cause of concern for European businesses. The move is part of a trade deal agreed upon by Chinese President Xi Jinping and his American counterpart Donald Trump, which may help ease some concerns over supply chain disruptions. Nexperia, a company that makes basic but essential technologies like diodes, voltage regulators, and transistors, plays a major role in the global chip supply chain. These chips are primarily used in cars but also find applications in industrial components and consumer electronics such as refrigerators. The company manufactures these chips in Europe before sending them to China for finishing and re-exporting them back to European clients. The chip shortage crisis has raised alarms among European carmakers and parts suppliers, who have warned of potential production stoppages. Nexperia supplies 49% of the electronic components used in the European automotive industry, according to German financial daily Handelsblatt. The European auto lobby ACEA had warned last month that without these chips, European automotive suppliers cannot build the parts and components needed to supply vehicle manufacturers. Despite their widespread use, Nexperia's chips aren't unique in terms of technology and are easily substitutable, according to French parts maker OPmobility. However, the process of getting new products approved by automakers takes time. This has added to the supply concerns for European businesses dependent on these chips for their production processes.
