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White House plans to release fact sheet soon on China

trade deal

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Automakers have warned Trump administration US auto plants

could

soon halt production

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The inexpensive chips are crucial for auto production

By David Shepardson

WASHINGTON, Oct 31 (Reuters) - The White House plans to

announce that Dutch chipmaker Nexperia's China facilities will

resume shipments, a source said, in what would be a relief for

auto manufacturers worldwide who faced the imminent prospect of

curbing production.

The Dutch government seized control this month of Nexperia,

owned by Chinese company Wingtech. The move prompted

Beijing to block Nexperia products from leaving China.

The company produces large volumes of semiconductors in the

Netherlands that are widely used in autos and consumer

electronics. Some 70% of the Netherlands-produced chips are

packaged in China and sold mostly to distributors.

The Chinese Commerce Ministry appeared to confirm the

source's comments in a statement, saying it will consider

exemptions for Nexperia chip exports from the country.

"As a responsible major country, China fully considers the

security and stability of domestic and international production

and supply chains," the ministry said, adding companies facing

difficulty obtaining parts should contact Chinese authorities.

"We will comprehensively consider the actual situation of the

enterprise and exempt eligible exports."

The White House did not immediately respond to a request for

comment. It is expected to soon release a fact sheet offering

more details on a trade truce between the U.S. and China that

included Nexperia and was struck at a summit between U.S.

President Donald Trump and his Chinese counterpart Xi Jinping in

South Korea this week.

Nexperia makes basic, inexpensive power control chips such

as transistors and diodes that cost only a few cents to buy.

However, such chips are needed in almost every device that uses

electricity.

In cars, they are used to connect the battery to motors, for

lights and sensors, for braking systems, airbag controllers,

entertainment systems and electric windows.

Automakers have warned the White House that without a steady

supply of chips, significant U.S. auto production would begin to

shut down in the coming weeks.

Honda ( HMC ) suspended production at a Mexican plant on

Tuesday, and has started to adjust production in the U.S. and

Canada, a spokesperson said.

Reuters reported on Friday that Nexperia suspended supplies

of wafers to its Chinese assembly plant, according to a letter

addressed to its customers, which could exacerbate the supply

squeeze.

Court filings showed that the seizure by the Dutch

government came as U.S. pressure was rising on Nexperia after

Wingtech was placed on a restricted-export list, though Dutch

authorities say governance shortcomings were the trigger.

Industry bodies have sounded the alarm over the possible

impact on production. On Thursday, Stellantis ( STLA ), which

makes Jeep SUVs, said it had set up a "war room" to monitor the

situation.

Japanese automaker Nissan ( NSANF ) said it had enough chips

at the moment to last until the first week of November without

disruption.

(Reporting by David Shepardson; Editing by Scott Malone, David

Gregorio and Muralikumar Anantharaman)