【By Liu Bai, Observer】The controversy over NXP Semiconductor, instigated by the Dutch government, is still ongoing. On the evening of November 3rd, a German automotive parts supplier is urgently seeking an exemption from China's export restrictions on NXP Semiconductor chips, hoping to resolve this trade impasse through political solutions.

Reuters reported on the 3rd that the global automotive parts giant ZF (AF) said it is cooperating with Chinese authorities to ensure chip supply. The company had previously stated on the 1st that it was prepared to put employees on unpaid leave if the supply crisis worsened.

"ZF is maintaining communication with Chinese authorities through its Chinese subsidiary and is taking all necessary measures to restore chip deliveries," said the company's spokesperson.

A source familiar with the matter revealed that Aumovio, an automotive parts supplier spun off from Germany's Continental Group, has also applied for an exemption and submitted relevant documents to the Chinese Ministry of Commerce. Aumovio declined to comment on this.

The report states that companies welcome signs of easing trade disputes, but industry insiders say they remain concerned that the exemption application process may be complex and the approval timeline is unclear.

"China has slightly relaxed the regulations regarding inventory exports," said Dominik Zillner from Components at Service, a German electronic component distributor. He added that this must be approved by the Chinese Ministry of Commerce to be realized.

Munich, Germany: Volkswagen transport vehicles parked at a marshaling yard, Visual China

Meanwhile, European automakers are still facing the risk of production halts, and companies are preparing temporary shutdown measures.

Europe's largest automaker, Volkswagen, cannot guarantee production in its German factories after this week. On October 30th, Volkswagen's Chief Financial Officer Arno Antlitz stated during a call with analysts that the company is urgently allocating resources each week to ensure sufficient supply of about 2000 small semiconductors. "Our chip inventory can only last until next weekend."

Bosch, due to supply shortages, has registered plans to put employees at its Salzgitter factory on unpaid leave.

ZF said it is also making preventive preparations for such measures, but it is currently unclear when chip deliveries from China will be restored to what extent.

Klaus Schmitz, partner at Arthur D. Little, earlier pointed out that automakers are considering pausing production or using alternative parts to get through this shortage.

But he also said that ultimately, both companies and governments will have to sit down and negotiate with China.

"Companies are definitely going to negotiate with China now, and governments around the world are also negotiating with China, especially the United States," Schmitz said. "The actual impact remains to be seen, but this is likely to be a rather serious situation."

The Dutch government's aggressive actions against Chinese enterprises have pushed a host of global automakers into a new chip supply crisis.

After the incident, it is reported that China has banned the enterprise from exporting products. Subsequently, on the 31st, NXP Semiconductor is reportedly suspended from supplying wafers to its Chinese factories. Soon after, several sources revealed that the White House would announce that NXP Semiconductor is about to resume chip shipments.

Nexperia's parent company, Joying Technology, stated that any agreement to restart NXP Semiconductor's exports from China must include the reinstatement of the company's former CEO as a condition.

Previously, China had responded to questions from reporters regarding the issue of NXP Semiconductor. The spokesperson for the Ministry of Commerce on November 1st emphasized that the Dutch government's improper intervention in corporate internal affairs has caused chaos in the global supply chain. As a responsible major country, China fully considers the safety and stability of domestic and international supply chains, and welcomes enterprises encountering actual difficulties to contact the Ministry of Commerce or local commerce authorities in time. We will comprehensively consider the actual situation of enterprises and grant exemptions for exports that meet the conditions.

This latest statement was interpreted by the Financial Times as "a signal from China to relax export controls," which may mark a sign of easing the dispute. Previously, this dispute had prevented European, Japanese, and American car manufacturers from obtaining chips needed for critical supply chain components such as airbags and lights, putting global major automakers at risk of a "production halt" at one point.

Reuters and Bloomberg also mentioned that the possibility of restoring chip supplies could effectively alleviate market concerns, giving global automakers on the brink of production cuts a "relief" (be a relief).

Although the Dutch side previously firmly denied that its actions of seizing Chinese enterprises were directed by the United States, the public generally believes this move was to comply with Washington's so-called "50% penetration rule" export control issued in late September. However, after the US put this rule on hold, the Netherlands found itself in an awkward position.

Sebastian Kuntin Trejo-Figueroa, a geopolitical analyst at the University of Hong Kong and academician of the Asia Global Institute, stated, "The previous actions of The Hague seemed necessary, but a single sentence from Trump made this so-called 'necessity' disappear."

"The Netherlands is facing multiple complex dilemmas, including legal consistency, political credibility, and the survival of its industry," he added.

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