Chipmaker Nexperia back in Chinese hands

The Dutch government is suspending the takeover of chipmaker Nexperia after what it described as constructive talks with Chinese authorities. The move was welcomed by carmakers, including BMW, which had faced disruptions due to the dispute.

The Netherlands-based, Chinese-owned Nexperia is a key supplier of basic computer chips to the global car industry, as well as to consumer electronics manufacturers.

The government seized control of Nexperia from its Chinese owner Wingtech in September, citing national security and concerns about the company’s future in Europe.

Beijing responded by limiting exports of the firm’s finished products from China, a step that contributed to chip shortages for manufacturers across Europe and the world.

The standoff between The Hague and Beijing triggered supply disruptions that hit production at companies such as BMW, Honda, Nissan, Volkswagen, and Bosch.

However, Dutch Economy Minister Vincent Karremans announced that the government is now halting its intervention after diplomatic progress with China.

“We are positive about the measures already taken by the Chinese authorities to ensure the supply of chips to Europe and the rest of the world. We see this as a show of goodwill,” Karremans said in a statement.

The minister said the talks would continue and that the decision was made in close consultation with European and international partners.

The EU’s trade chief, Maroš Šefčovič, welcomed the move, saying it would help stabilize supply chains. BMW and Bosch were among those who also welcomed the development, but noted that it is too early to judge its impact.

Why did the Netherlands intervene?

The Netherlands seized control of Nexperia under the Cold War-era Goods Availability Act, which has been in effect since 1952 but had never been previously invoked. The law allows the government to block or reverse company decisions if they are judged potentially harmful to the Netherlands or Europe.

The government said it was acting to prevent Nexperia’s former chief executive, Wingtech founder Zhang Xuezheng, from moving its operations to China.

The chips manufactured by Nexperia in Europe are sent to China for packaging and

Beijing responded by halting exports of these finished products, a measure it has since partly relaxed.

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Wingtech acquired Nexperia in 2019 and was reportedly planning to relocate all production to China. Dutch officials accused Zhang of attempting to undermine Nexperia’s production in Europe for his own “self-enrichment.”

He was removed by court order from Nexperia over allegations of mismanagement. Wingtech said it "strongly rejects these accusations” and demanded Zhang’s reinstatement. It urged the Dutch government to end participation in the case, which was brought forward by the firm’s European managers.

As the dispute escalated, Nexperia’s Chinese arm declared it would no longer take orders from the European management. European managers then halted shipments of chips to China, citing non-payment.

The Chinese side is now selling down its chip stockpiles to ease the shortages faced by customers, while the European side said it is preparing a response.

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