The European Union is considering temporarily lifting sanctions on a major Chinese semiconductor supplier. Previously, European automakers warned that failure to remove the ban could throw supply chains into chaos.
According to sources cited by Bloomberg, the EU executive body, the European Commission, could propose as early as this week to exempt Chinese chip manufacturer Yangtze Technology from sanctions. However, this measure would still need approval from all 27 EU member states before coming into effect.
Currently, Yangtze Technology is listed in the EU’s 20th round of sanctions against Russia, with the EU claiming that these China-based entities provide Russia with dual-use goods or weapons systems. Yangtze Technology was sanctioned in April this year, on the grounds that dozens of its technical products reportedly flowed into Russia, and its products were found in drones and glide bombs used against Ukraine.
Sources say European automakers have lobbied the EU to delay implementing the ban, arguing that carmakers have not had enough time to diversify their supply chains and that the related measures could exhaust inventories within weeks.
Sources say European automakers have lobbied the EU to delay implementing the ban, arguing that carmakers have not had enough time to diversify their supply chains and that the related measures could exhaust inventories within weeks.
The report notes that any exemption is expected to be only a temporary arrangement, possibly lasting several months, giving the industry time to seek alternative suppliers.
At the end of last year, a corporate control dispute broke out within Chinese-held chip manufacturer Nexperia, evolving into a public dispute. At that time, the auto industry already felt significant supply pressure.
At the time, the Dutch government invoked Cold War-era national security laws to take over the company’s Dutch operations. Beijing responded with countermeasures by restricting exports from Nexperia’s Chinese subsidiaries, causing chip shortages and affecting production at numerous automotive companies.
At the time, the Dutch government invoked Cold War-era national security laws to take over the company’s Dutch operations. Beijing responded with countermeasures by restricting exports from Nexperia’s Chinese subsidiaries, causing chip shortages and affecting production at numerous automotive companies.
Subsequently, driven by the rise of artificial intelligence applications, surging demand for memory chips further squeezed supply and pushed prices higher.