Nexperia: How BMW is Weathering China’s Chip Disruption

China has lifted export restrictions on chips made by Chinese-owned Nexperia, granting exemptions for civilian applications.

The decision eases pressure on European automakers, which had warned of potential shortages caused by earlier disruptions.

Meanwhile, China has paused its planned ban on materials vital to semiconductor manufacturing and waived port fees for ships linked to the US, signalling broader trade de-escalation between the two nations.

The chips at the centre of the dispute are made by Nexperia, a Dutch semiconductor manufacturer owned by China’s Wingtech.

Though relatively simple and low-cost, they remain critical components in modern vehicle electronics.

While headquartered in the Netherlands, roughly 70% of Nexperia’s chips are produced in China and exported worldwide.

Tensions escalated when the Dutch government assumed control of the firm in October, citing “serious governance shortcomings”.

In response, China halted exports, disrupting global supply chains.

The freeze affected nearly three-quarters of Nexperia’s global chip output and sparked immediate concern among European automakers.

The European Automobile Manufacturers’ Association (EMEA) warned that existing stockpiles would last only weeks if exports failed to resume.

Automakers across the region felt mounting strain, with Volvo Cars, Jaguar Land Rover and Volkswagen all cautioning that constrained chip supplies could prompt temporary factory shutdowns.

 Amid intensifying pressure, China’s commerce ministry announced it would lift licensing requirements for Nexperia chips designated for civilian use, effectively restoring export access.

The chips in question, produced by Nexperia, a Dutch-based semiconductor specialist owned by Chinese company Wingtech, are simple, low-cost components but essential for modern car electronics.

Though based in the Netherlands, about 70% of Nexperia’s chips are completed in China and then exported globally. 

When the Dutch government took control of the firm in October over what it called “serious governance shortcomings,” China responded by blocking exports, putting supply chains at risk. This export block affected nearly three-quarters of Nexperia’s global chip output and triggered immediate concern from European automakers. 

The European Automobile Manufacturers’ Association (EMEA) warned stockpiles would last only weeks unless exports resumed.

The move put pressure on automakers across the region. Volvo Cars, Jaguar Land Rover and Volkswagen all warned that limited chip supply could force temporary production halts. 

In response to the growing pressure, China’s commerce ministry confirmed it would now exempt Nexperia chips for civilian use, removing the licensing requirement for exporters.

EU Trade Commissioner Maros Sefcovic says the country has agreed to "the further simplification of export procedures for Nexperia chips", adding that discussions with Dutch and Chinese officials continue "as we work towards a lasting stable predictable framework that ensures the full restoration of semiconductor flows". 

China’s ministry also used the announcement to criticise the Dutch government’s decision and call on the EU to "continue exerting its influence to urge the Netherlands to correct its erroneous practices as soon as possible". 

China softens wider trade stance

The Nexperia decision comes amid a broader thaw in trade tensions between Beijing and Washington.

Following an October agreement between President Xi Jinping and US President Donald Trump to halt further tariff escalations, China suspended planned export bans on critical semiconductor materials.

These include gallium, germanium, antimony and other super-hard compounds, all classified as “dual-use items” for their civilian and military applications.

The suspension will remain in effect until 27 November 2026.

China’s transport ministry also confirmed a one-year waiver on port fees for ships linked to the United States, effective 11 November.

Professor David Bailey of the University of Birmingham described the Dutch government’s intervention as “a wake-up call” for the automotive sector.

He says: "The Dutch government may well have had good reasons to take control but it hadn't thought through the implications. The retaliation from China was swift and brutal."

He also urges automakers to plan for future supply interruptions: "There’s a need to find alternative processing sites - maybe in south east Asia or Europe - and keep bigger stocks of products."

Automakers respond and reflect

In an interview with Supply Chain Digital, Nicolai Martin, Member of the Board of Management for Purchasing and Supplier Network at BMW, confirmed that while the company does not source chips directly from Nexperia, the components are integrated into parts supplied by its vendors.

“They are small and cheap parts but with relevant impact spread over the whole vehicle,” he says. “Our production still runs as planned but we are in a volatile situation. That can change.”

Nicolai says BMW uses established processes developed during the chip crisis to track risks through its supplier base. 

“We had transparency on this topic in a few hours,” he says, crediting internal procedures and supplier cooperation.

However, he admits that lessons from the previous crisis focused on more complex chips and missed the risks of these “super small and mass product parts". 

He continues: "There are suppliers supporting a much longer supply also with exterior parts now and others with short supply chains. That leads to additional lessons learned with some partners.”

Although BMW has so far avoided production disruptions, Nicolai notes: “We give our best to avoid impact if it comes to the political discussion. The whole topic was created through political aspects. We appreciate the fast clarification and deescalation, but the effects on the supply chain must still be managed.”

For supply chain leaders, this signals deeper challenges. 

Sapna Amlani, Supply Chain Director at Moody’s, adds: "The Nexperia case isn’t just a governance dispute – it’s a warning shot for global supply chains." 

The disruption, she notes, affected basic components that are foundational to manufacturing: “When they stop flowing, industries stall.”

Her advice includes multi-sourcing, building in governance checks, scenario planning and improving real-time visibility tools. 

“Supply chains are moving from efficiency-driven to resilience-driven,” she adds. 

“Companies that act now – diversifying, digitising and stress-testing their networks – will be better positioned when the next geopolitical fault line emerges.”