China has taken a significant step toward easing tensions in the global semiconductor supply chain by announcing it will exempt certain Nexperia chips from an export ban that has rattled automakers worldwide.
This move comes just days after a pivotal meeting between US President Donald Trump and Chinese President Xi Jinping in South Korea, where the two leaders struck a one-year trade truce aimed at cooling months of escalating tariff wars and tech restrictions.
The timing has sparked speculation that Nvidia, the American AI chip giant whose Chinese market share has collapsed from 95% to zero under current restrictions, could be the next beneficiary of this diplomatic thaw.
Why China backed down on Nexperia export ban
China’s Ministry of Commerce announced Saturday it would “comprehensively consider the actual situation of enterprises and grant exemptions to exports that meet the criteria” for Nexperia chips.
The decision marks a reversal of a ban imposed after the Netherlands seized control of the Chinese-owned Dutch chipmaker in late September.
The dispute began when Dutch authorities invoked a Cold War-era law to take temporary control of Nexperia due to governance concerns, prompting Beijing to retaliate by blocking the re-export of Nexperia chips to Europe.
The chipmaker produces tens of billions of simple but critical semiconductors annually, including diodes, transistors, and voltage regulators that are essential for automotive electronics, from locks and climate control to speedometers and safety systems.
The export freeze sent shockwaves through the global auto industry.
Major players, including Volkswagen, BMW, Mercedes-Benz, Nissan, and Stellantis, have warned that they may have to suspend production soon, as their backup chip supplies are running out rapidly.
The European Automobile Manufacturers’ Association even sounded the alarm, saying some factories could shut down within days if chip shipments don’t start moving again.
The reason? Nexperia holds about 40% of the market for these essential chips, and roughly 60% of its $2 billion annual revenue comes from automakers.
China’s decision to grant selective exemptions appears directly linked to the Trump-Xi summit held Thursday in Busan.
The Wall Street Journal reported that the resumption of Nexperia shipments was part of the broader trade deal agreed by the two leaders, which also included suspending Trump’s threatened 100% tariff on Chinese goods, halving the fentanyl-linked tariff from 20% to 10%, and pausing China’s export controls on rare earth minerals for one year.
Could Nvidia be next after the Trump-Xi meeting?
The semiconductor discussions between Trump and Xi have raised hopes and questions about whether Nvidia could regain access to China’s massive market.
Trump confirmed aboard Air Force One that he and Xi “did discuss chips” and that China would be “talking with Nvidia and others” about purchasing American-made semiconductors.
However, the president quickly clarified that the talks did not cover Nvidia’s most advanced Blackwell chip, a state-of-the-art AI processor he had previously described as “super-duper” and “probably 10 years ahead of any other chip”.
Nvidia CEO Jensen Huang expressed optimism about the potential for re-entering China while acknowledging the final decision rests with Trump.
We always hope to go back to China, and I believe Nvidia’s being there is good for both the United States and China.
The stakes couldn’t be higher for Nvidia.
After Beijing urged tech giants like ByteDance and Alibaba to stop buying its H20 chip, a China-compliant version of its flagship AI hardware, Nvidia’s business in the country has basically vanished.
CEO Jensen Huang said in October that the company’s share of China’s AI accelerator market plunged from about 95% to zero, wiping out billions in revenue.
That’s a huge blow, considering China once made up 20–25% of Nvidia’s $41 billion data center business.
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