Beijing has said it will loosen a chip export ban it imposed after Dutch authorities took over Nexperia, a Chinese-owned chipmaker based in the Netherlands.
In September, the Netherlands invoked a Cold War-era law to take control of Nexperia, stating serious governance shortcomings which could impact the availability of chips - which are critical for making cars - in an emergency.
China said in response that it would not re-export Nexperia chips completed in its Chinese factories to Europe. Last month, the likes of Volvo Cars and Volkswagen warned it could lead to temporary shutdowns at their plants.
On Saturday, Beijing said it would consider exempting individual firms from the ban.
Around 70% of Nexperia chips made in Europe are sent to China to be completed and re-exported to other countries.
On Saturday, the Chinese government said: We will comprehensively consider the actual situation of enterprises and grant exemptions to exports that meet the criteria. It did not elaborate on what that criteria is, but criticised the Dutch government's improper intervention in the internal affairs of enterprises which, it said, led to the current chaos in the global supply chain.
Last week, in a letter seen by the Reuters news agency, Nexperia told customers it would stop sending chips to China to be processed. It said it was developing alternative solutions to ensure supply continuity for customers.
Nexperia is headquartered in the Netherlands but owned by Wingtech, a company backed by the Chinese government, which acquired the Dutch business in 2018.
In October, Zhang Xuezheng, Nexperia's chief executive and the founder of Wingtech, was ousted as the firm's boss after a Dutch court suspended him as a director.
The Dutch Ministry of Economic Affairs said at the time it was concerned about serious managerial shortcomings under his leadership and observed that Nexperia's operations in Europe were being compromised in an unacceptable manner.
Last month, the European Automobile Manufacturers' Association (ACEA) had warned Nexperia chip supplies would only last a few weeks unless the Chinese ban was lifted.
Without these chips, European automotive suppliers cannot build the parts and components needed to supply vehicle manufacturers and this therefore threatens production stoppages, the group said.
The latest plans by Beijing to relax its export controls have emerged after US President Donald Trump and Chinese counterpart Xi Jinping met in South Korea earlier this week.
Trump later said the leaders discussed chips, while Beijing's post-meeting readout did not explicitly mention any area of trade.
The White House is expected to release a fact sheet later on Saturday detailing its new trade agreement with China.
In December 2024, the US government placed Chinese chip manufacturer Wingtech on its so-called entity list, identifying the company as a national security concern.
In the UK, Nexperia was forced to sell its silicon chip plant in Newport after MPs and ministers expressed national security concerns. It currently owns a UK facility in Stockport.
