Dutch government takes control of chipmaker Nexperia due to “national and economic security”

The Dutch Department of Economic Affairs is taking over management of the semiconductor manufacturer Nexperia. The government is concerned that the knowledge and capabilities of crucial technology are being transferred to its Chinese parent company, Wingtech.

The Goods Availability Act has been invoked because of recent and acute signals of “serious governance shortcomings and actions” within Nexperia.

“These signals posed a threat to the continuity and safeguarding on Dutch and European soil of crucial technological knowledge and capabilities. Losing these capabilities could pose a risk to Dutch and European economic security,” Vincent Karremans, Secretary of Economic Affairs, said in a press release published Sunday evening.

Nexperia produces, among other things, chips used in the European automotive industry and consumer electronics. If these products were to become unavailable, this could be disastrous for the critical value chain for Europe, especially in an emergency. By taking control of all of Nexperia’s daily affairs, the Dutch government intends to mitigate this risk.

The Goods Availability Act has been in effect since 1952, but has rarely been invoked. The Act enables the Department of Economic Affairs to block or reverse company decisions if they are potentially harmful to the Netherlands or Europe.

According to Secretary Vincent Karremans, this move is “highly exceptional,” but necessary to safeguard the country’s and Europe’s security.

“Only due to the significant scale and urgency of the governance deficiencies at Nexperia has the decision been made to apply the Goods Availability Act. This is a measure the government uses only when absolutely necessary,” Karremans explains.

Wingtech, the owner of Nexperia, accuses the Dutch government of staging a coup. According to the company, Chairman Zhang Xuezheng was suspended from Nexperia’s boards by an Amsterdam court order on October 6th, and an independent non-Chinese, third-party trustee with a deciding vote would be appointed in his place.

“The Dutch government’s decision to freeze Nexperia’s global operations under the pretext of ‘national security’ constitutes excessive intervention driven by geopolitical bias, rather than a fact-based risk assessment. This action seriously contravenes the European Union’s long-standing commitment to market economy principles, fair competition, and international trade norms. We express our strong protest against such discriminatory treatment targeting Chinese-funded enterprises,” Wingtech states in a press release.

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