Germany sees early signs of easing China chip supply tensions

The German government has said early signs from China suggest tensions over semiconductor supplies, vital for Germany's struggling automotive industry, may be easing.

"The latest reports from China are positive first signs of easing tensions," the Economy Ministry in Berlin said on Sunday in response to an enquiry.

"The German government is monitoring the situation very closely," the ministry added. "We take the situation of the affected companies very seriously and are in discussions with the companies, as well as Dutch and European partners in various formats."

However, it said a final assessment is not yet possible.

The Netherlands-based chip manufacturer Nexperia, a key supplier for the automotive industry, is experiencing supply problems after the Dutch government took control of the company, which was previously managed by a Chinese parent corporation. China halted the export of Nexperia products in response.

The dispute escalated further on Friday, when Nexperia suspended shipments of semiconductor products called wafers to its assembly plant in China.

Wafers are thin discs that serve as the basis for the production of electronic components. They are used in semiconductors and microchips, which are integral to all electronics — from smartphones and computers to vehicles.

On Saturday, China's Commerce Ministry urged affected companies to contact the ministry, saying it would review their cases and permit exports for firms meeting the relevant requirements. No further details were provided on those criteria.