EU to Lift Sanctions on Chinese Semiconductors Again?... Auto Industry Fears Supply Instability
The European Union (EU) is considering temporarily lifting sanctions on Chinese semiconductor suppliers due to concerns that the automotive industry may face production disruptions if alternative supply chains cannot be secured.
According to Bloomberg News on the 21st (local time), citing sources, the European Commission, the EU's executive branch, is expected to propose as early as this week an exemption for Yangzhou Yangjie Electronic Technology, a semiconductor manufacturer. This measure will require the approval of all 27 EU member states to take effect.
Yangjie Electronic was included in the EU's 20th package of sanctions against Russia. The EU placed Chinese companies suspected of providing dual-use goods or weapons systems to Russia under sanctions. Yangjie Electronic has long been suspected of its technology being shipped to Russia dozens of times. Last month, it was sanctioned after its products were found in drones and glide bombs used in attacks on Ukraine.
Sources said that European automotive companies have requested the EU to delay the sanctions. These companies argued they did not have enough time to diversify their supply chains and that, if the measure were enforced, their inventories would be depleted within weeks.
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The European automotive industry also faced a severe supply shortage at the end of last year. This occurred when an internal conflict at Chinese semiconductor company Nexperia became public. At that time, the Dutch government invoked Cold War-era legislation to control Nexperia's business operations in the Netherlands, citing national security concerns. In response, China blocked exports from Nexperia's Chinese subsidiary. This led to a chip shortage, which disrupted production for several automotive companies.
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