The Dutch government suspended its takeover of chipmaker Nexperia on Wednesday, saying it was making a ‘goodwill’ gesture in response to ‘positive’ talks with China.
The Dutch state took control of the chipmaker in September saying it feared Beijing was able to access the company’s tech secrets.
Subsequently, it also said that the intervention was needed to prevent Nexperia’s former CEO from moving its operations to China.
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Beijing responded to the takeover by halting exports of Nexperia’s finished products on October 4, a measure it has since partly relaxed.
Dutch Economy Minister Vincent Karremans said in a statement on Wednesday that suspending the intervention was a gesture of goodwill, adding that talks will continue.
“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,” he said in a statement.
Meanwhile, European Union trade chief Maros Sefcovic welcomed the move, saying it would help stabilize supply chains.
China’s Commerce Ministry responded saying it welcomed the move as a “first step in the right direction towards properly resolving the issue,” according to a report by the AFP.
Automakers in a flux
The easing tension between China and the Netherlands will give some comfort to customers like carmakers who have been facing chip shortages.
Nexperia’s chips are technologically simple but ubiquitous in car electronic systems and other consumer products.
China’s clampdown on exports of its chips left major suppliers like Bosch, Aumovio and ZF Friedrichshafen scrambling for alternative suppliers.
Bosch said it was struggling with disruption at three of its production sites and sending workers home when necessary. ZF Friedrichshafen said its chip supplies were secure until the middle of next week.
The shortages have hit supply chains in Asia too. Japan’s Nissan is set to cut production at its Kyushu plant next week due to chip shortages, a person familiar with the matter told Reuters.
Japan’s Honda has signalled some easing, meanwhile, saying it would resume regular output at its North American plants.
Uncertainty will remain
Even with Wednesday’s developments, supply chain issues have not yet been resolved. Nor has a dispute between Nexperia’s European headquarters and its Chinese parent Wingtech.
Automakers BMW, Bosch and Aumovio said they welcomed the development but that it is too early to judge what impact it will have. Their competitors Mercedes-Benz and Volkswagen declined to comment.
Nexperia manufactures most of its wafers in Hamburg, Germany, and then sends them to Dongguan, China to be packaged and sent on to customers.
After the Dutch state intervention, Nexperia’s Chinese arm declared itself no longer subject to control by European management and on October 26, the European side of the company stopped shipping wafers to it, citing non-payment.
That stalemate continues to threaten supplies, although the Chinese side is now selling down stockpiles of chips it has previously processed, offering temporary relief to customers. Nexperia said it was preparing a reaction.
Separately, a Dutch court in October ordered the removal of ex-Nexperia CEO and Wingtech founder Zhang Xuezheng, citing alleged mismanagement.
A spokesperson for Wingtech, which oversees Nexperia’s Chinese operations, said it “strongly rejects these accusations” and the Dutch government should end participation in the case, which was brought by the company’s European managers.
“The ministry should now file a letter with the (court), explicitly withdrawing its support for the proceedings,” the spokesperson added.
The next step in the legal process will be hearings on a formal investigation into mismanagement, a spokesperson for Amsterdam’s Enterprise Court said.
No date has been set.
- Reuters, with additional editing by Vishakha Saxena
Also read:
Dutch Minister Says China ‘Biggest Threat’ to Chip Tech Secrets
Chinese-Owned Nexperia Set to Take Over Dutch Chip Startup
UK’s Largest Chip Plant Staff Want to Keep China Owners – BBC
ASML Employee Who Stole Chip Secrets ‘Went to Work at Huawei’
China’s Dutch Chip-Equipment Imports Jump 1,050% – SCMP
China Threatens to Cut Off ASML Over New US Chip Curbs
Chinese Spies Targeting Dutch Tech: Intelligence Agency
