How the Suspended BIS 50% Rule Complicates the Nexperia Chip Crisis

Article Highlights:

• A recent meeting between U.S. President Donald Trump and Chinese President Xi Jinping on October 30 set off a new chapter in the Nexperia saga, as the U.S. announced that it would be postponing implementation of the BIS’s Affiliates Rule for a full year. 
• Almost immediately after the trade talks, the Chinese government started accepting exemption requests from Nexperia customers, permitting them to resume sourcing from the chipmaker. The Chinese Ministry of Commerce (MOFCOM) is focused on reviewing potential exemptions for many of the major automakers experiencing disruptions stemming from the export restrictions announced on October 4.
• But the plot continues to thicken, as a letter dated October 29 and obtained by Reuters revealed that Nexperia’s headquarters in the Netherlands had stopped supplying wafers to its Chinese facilities. The letter, which was signed by Nexperia interim CEO Stefan Tilger, said that the decision was a “direct consequence of the local management’s recent failure to comply with the agreed contractual payment terms." 

For much of the month of October, major automakers in the U.S., Europe, and Asia were scrambling to respond to the unprecedented situation faced by Nexperia, the Dutch semiconductor manufacturer caught in an ownership struggle between China and the Netherlands. After a series of trade measures that began with the U.S.’s announcement in late September that it would be implementing the “Affiliates Rule” to the Bureau of Industry and Security’s Entity List, on October 4 China imposed export restrictions on the Nexperia factories operating in the country. Because Nexperia is a key chip supplier to some of the world’s largest automobile manufacturers, these restrictions triggered panic in global supply chains. 

But things change fast in the world of tradecraft in 2025, and a meeting between U.S. President Donald Trump and Chinese President Xi Jinping on October 30 set off a new chapter in this international corporate saga. Following trade negotiations between the two presidents, it was announced that the U.S. would be postponing implementation of the BIS’s Affiliates Rule for a full year. Because the Affiliates Rule—which imposes export restrictions on companies that are at least 50% owned by organizations on the BIS Entity List—was the inciting event that set this whole multifaceted drama in motion, its suspension is almost certain to change the composition of the impending supply chain shortage and the challenges high-tech manufacturers are currently facing. 

But how, exactly, does this new development impact automakers, and does it spell an end to the looming supply chain crisis?

But how, exactly, does this new development impact automakers, and does it spell an end to the looming supply chain crisis?

The Nexperia Crisis 

The current Nexperia conflict began when the U.S. Bureau of Industry and Security announced plans to implement the Affiliates Rule. Under the new BIS rule, any business that is at least 50% owned by a company or other entity on the BIS Entity List or the Military End-User List is subject to the same Entity List/Military-End User List export restrictions as its parent company. Because Nexperia was acquired by Chinese telecommunications firm Wingtech Technology in 2019, and Wingtech Technology was added to the BIS Entity List in 2024, the new Affiliates Rule was set to impose the same export restrictions on the Danish chipmaker. 

The BIS announcement created what would become an unusual but highly illustrative corporate ownership dispute that set in motion a succession of events across the month of October. Encompassing the U.S., China, and the Netherlands, the Nexperia crisis is very much a plotline for our time, featuring trade conflict, geopolitically charged chip manufacturing, access to cutting-edge technology, and the nationalization of a strategically significant business. 

Timeline of Nexperia Ownership Dispute

• September 29: The BIS announces the implementation of the “Affiliates Rule.” According to the BIS, under the agency’s new rule, “any entity that is at least 50 percent owned by one or more entities on the Entity List or the Military End-User (MEU) List will itself automatically be subject to Entity List/MEU List restrictions. In addition, significant minority ownership by an Entity List/MEU List company is a red flag that triggers additional due diligence requirements for exporters.” As a subsidiary of China’s Wingtech Technology, Nexperia becomes subject to the Entity List and MEU export restrictions. 
• September 30: The Dutch government invokes the Goods Availability Act in an attempt to take control of Nexperia, which is still headquartered in the Netherlands. In a carefully worded news release, the government attributes the takeover to “recent and acute signals of serious governance shortcomings and actions within Nexperia” that pose a “threat to the continuity and safeguarding on Dutch and European soil of crucial technological knowledge and capabilities.” Given the implications for intellectual property and technology transfers between the U.S. and Nexperia, the Netherlands’ actions seem to be an attempt to pull Nexperia out of the scope of the BIS and its new Affiliates Rule. 
• October 4: The Chinese Ministry of Commerce issues export controls on Nexperia, banning its Chinese units and their subcontractors from shipping finished components and sub-assemblies manufactured in China to any other countries. Two weeks later, the company’s Chinese management issues a letter telling employees to “disregard external interference.”
• October 30: U.S. President Trump and Chinese President Xi Jinping reach a trade agreement in South Korea. As part of the new terms, the U.S. agrees to postpone the implementation of the BIS’s Affiliates Rule for one year. With the Affiliates Rule suspended, Nexperia is no longer subject to Entity List restrictions. In addition, China vows to “take appropriate measures to ensure the resumption of trade from Nexperia’s facilities in China, allowing production of critical legacy chips to flow to the rest of the world.”
• November 1: The Chinese government starts accepting exemption requests from Nexperia customers that would permit them to resume sourcing from the chipmaker. According to the South China Morning Post, the Chinese Ministry of Commerce (MOFCOM) is focused on reviewing potential exemptions for many of the major automakers experiencing disruptions stemming from the export restrictions announced on October 4.

State of the Global Automotive Supply Chain

As we outlined in our explainer on the Nexperia crisis, the Dutch chipmaker plays an outsized role in the global automotive supply chain. For specific automotive semiconductors like transistors and diodes, the company controls around 40% of the total market share. In the aftermath of China’s export control announcement on October 4, automakers and trade organizations representing the industry voiced serious concerns about the continuity of their supply chains. 

By late October, a new chip shortage was materializing, as manufacturers like Volkswagen, Honda, and Nissan were all pointing to possible production suspensions and factory shutdowns within a matter of weeks. The European Automobile Manufacturers Association (ACEA) Director General Sigrid de Vries warned that the Nexperia crisis had thrust the automotive industry into an “alarming situation. We really need quick and pragmatic solutions from all countries involved.”

By late October, a new chip shortage was materializing, as manufacturers like Volkswagen, Honda, and Nissan were all pointing to possible production suspensions and factory shutdowns within a matter of weeks.

How the U.S.-China Trade Talks Impact the Nexperia Conflict

Given just how dynamic and unpredictable the Nexperia situation has been over the past month, it’s not necessarily surprising that it has taken yet another surprising turn. The trade negotiations between the U.S. and China at the end of October yielded two critical concessions, one from each country. While the U.S. agreed to suspend the BIS Affiliates Rule for one year, China promised to work with its Nexperia facilities to resume exports to customers all over the world. Just a few days after the trade talks concluded, reports began emerging that MOFCOM would start accepting exemption requests from international customers with an eye toward resuming Nexperia’s chip exports. 

These developments would suggest that automakers may have eluded another crippling chip shortage by the skin of their teeth, and will be able to resume sourcing from Nexperia in the coming days and weeks. There are still two major concerns automakers and other related stakeholders need to be aware of, however. 

There are still two major concerns automakers and other related stakeholders need to be aware of, however. 

One, based on the estimates being floated in the media in late October, automakers like Volkswagen, Honda, and Nissan were poised to hit the bottom of their inventories for specific semiconductors by early November. Depending on just how quickly the exemptions are granted by MOFCOM, some automotive manufacturers may still need to cut production and revise their manufacturing outlook for the remainder of 2025. 

Second, and arguably more importantly, a letter dated October 29 and obtained by Reuters revealed that Nexperia’s headquarters in the Netherlands had stopped supplying wafers to its Chinese facilities. The letter, which was signed by Nexperia interim CEO Stefan Tilger, said that the decision was a “direct consequence of the local management’s recent failure to comply with the agreed contractual payment terms." Around 70% of Nexperia’s chips are packaged in China, and cutting off those facilities’ access to wafers could trigger another related supply crunch. This new development reveals just how many layers there are to this ownership crisis, and may indicate that even a much-needed trade détente between the U.S. and China may not be enough to reclaim the supply chain status quo and reinstate Nexperia’s critical role in global automotive manufacturing. 

Find Alternatives to Nexperia Parts With Z2Data 

The Nexperia dispute has been such a fascinating story because of just how many timely themes and narratives it encompasses, including semiconductor technology, trade restrictions, supply shortages, and the increasingly prevalent role national governments are now playing in the corporate sector. But while the saga has been engrossing to watch from a comfortable distance, automakers and other original equipment manufacturers (OEMs) that source from Nexpria do not want to become collateral damage in this multinational chip skirmish. 

Organizations that want to act quickly and decisively to find alternatives to Nexperia chips can draw on the data and insights provided by supply chain risk management (SCRM) platform Z2Data. Z2Data has a number of capabilities that can help businesses navigate this supply chain squeeze:

• Identify all Nexperia components your company is currently sourcing.
• Search for all available crosses to Nexperia parts.
• Assess available inventory across global electronic component distributors.
• Use part-to-site mapping to pinpoint which of your parts that are being manufactured in China.

Even if the Nexperia crisis resolves itself over the next few weeks or months, trade risks are not disappearing from the electronic supply chain anytime soon. Trade conflicts, export restrictions, and growing nationalization all mean that electronic component sourcing is less stable than in years past—and flexibility, optionality, and resilience now serve as critical advantages. 

To learn more about Z2Data and how it can help you expertly navigate the Nexperia dispute, schedule a demo with one of our product experts. You can also contact your Z2Data representative or email info@z2data.com.