Auto giants rally as China considers Nexperia chip export exemptions
In this photo illustration, the logo of semiconductor manufacturer Nexperia is displayed on a screen.
Vcg | Visual China Group | Getty Images
Shares of Europe’s biggest carmakers rose on Monday as fears over an industry shortage of semiconductors appeared to recede.
China on Saturday said it would consider some exemptions for Nexperia chip exports. It had previously blocked Nexperia semiconductors from leaving the country after the Dutch government seized control of Nexperia, owned by the Chinese company Wingtech.
The standoff between the Netherlands and China had prompted automotive groups to raise the alarm over a worsening chip shortage.
France’s Renault, Germany’s Mercedes-Benz Group and Milan-listed shares of Jeep-maker Stellantis were all trading up around 3% on Monday morning.
Auto parts suppliers Valeo and Aumovio had advanced 3% and 1.6%, respectively, by around 11:30 a.m. London time (6:30 a.m. ET).
Germany’s Volkswagen, Porsche and BMW were also trading more than 1.3% higher.
Shares of Volkswagen over the last three months compared to other major European automakers.
Analysts at Barclays said developments over the weekend appeared to be “quite positive” for the automotive sector, with fears of significant disruption likely to be avoided.
“While the Nexperia issue is not fully resolved, with ongoing negotiations between the Dutch and Chinese government to determine a path forward for Nexperia, we believe the potential near-term production headwind has been remediated, although we await more details,” Dan Levy, senior autos analyst at Barclays, said in a research note published Monday.
The situation involving Nexperia began in September, when the Dutch government took control of the company, in what was seen as a highly unusual move, reportedly after the U.S. raised security concerns.
In making the decision, the Dutch government cited fears that tech from the company — which specializes in the high-volume production of chips used in automotive, consumer electronics and other industries — “would become unavailable in an emergency.”
China responded by blocking exports of the firm’s finished products.
German automakers are thought to be especially sensitive to Nexperia-related disruptions because they rely heavily on large, domestic suppliers, known as “Tier 1s,” and local production facilities and companies, such as Nexperia, despite much of its manufacturing moving to China.
Japan’s Honda Motor became the first known automaker to reduce production due to the problem last week.
