The European Union will propose to temporarily lift sanctions against a Chinese semiconductor supplier following warnings from automakers about potential supply chain chaos if the ban is not removed. This was reported by Bloomberg, according to UNN.
Details
The European Commission—the EU's executive arm—could propose this easing as early as this week, according to sources familiar with the situation. Implementing such a decision requires approval from all 27 member states of the bloc.
A spokesperson for the European Commission did not immediately respond to a request for comment.
The Chinese semiconductor manufacturing company was included in the EU's 20th sanctions package, which listed Chinese entities that, according to the bloc, supplied Russia with dual-use goods or weapons systems.
European automakers urged the EU to delay the ban, stating they had insufficient time to diversify supply chains and that the imposed restrictions could lead to stockouts within a few weeks, sources said on condition of anonymity.
The automotive industry already experienced serious supply issues late last year when an internal corporate conflict at the Chinese chipmaker Nexperia became public. The Dutch government took control of the company's operations within the country, citing a Cold War-era law aimed at protecting national security.
In response, Beijing blocked exports from Nexperia's Chinese division, causing chip shortages and complicating production for several automotive companies, even though Nexperia produces so-called "legacy" chips—low-tech semiconductors that control power.
Since then, a surge in demand for memory chips driven by the development of artificial intelligence applications has also worsened the supply situation and significantly increased prices.
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