A close-up view of the sign at the Nexperia plant in Newport, Wales, on April 1, 2022.
Matthew Horwood | Getty Images News | fake images
The Dutch government has taken control of Nexperia, a Chinese-owned semiconductor maker based in the Netherlands, in an extraordinary move to ensure that sufficient supply of its chips remains available in Europe amid rising global trade tensions.
Nexperia, a Chinese subsidiary Wingtech technologyspecializes in high-volume production of chips used in automotive, consumer electronics and other industries, making it vital to maintaining Europe’s technology supply chains.
On Sunday afternoon, the Dutch Economy Minister revealed that he had invoked the “Availability of Goods Act” on the company in September to “avoid a situation in which goods produced by Nexperia (finished and semi-finished products) would not be available in an emergency.”
Following the Hague announcement, Wingtech lowered its daily maximum limit of 10% on the Shanghai Stock Exchange.
The Goods Availability Act allows The Hague to intervene in private companies to ensure the availability of critical goods in preparation for emergency situations, and its use comes amid the escalating trade war between the United States and China.
The government statement said the “highly exceptional” measure was taken after the ministry observed “recent and acute signs of serious governance deficiencies and actions” within Nexperia.
“These signals pose 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,” he said, identifying the automotive industry as particularly vulnerable.
Governance changes
In a corporate filing dated Oct. 13, filed with the Shanghai Stock Exchange, Wingtech confirmed that Nexperia was under temporary external management and had been asked to suspend changes to the company’s assets, business or personnel for up to one year, according to a Google translation.
Wingtech Chairman Zhang Xuezheng was immediately suspended from his duties as CEO of Nexperia Holdings and non-executive director of Nexperia following the ministerial order, according to the document.
The document adds that Nexperia’s daily operations will continue and that the impact of the measures is not yet quantifiable.
“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,” Wingtech said in a since-deleted WeChat post, which was archived and translated by Chinese political blog Pekingnology.
It added that since acquiring Nexperia in 2019, Wingtech “has strictly complied with the laws and regulations of all jurisdictions where it operates, maintaining transparent operations and strong governance”, and employs “thousands of local staff” across research, development and manufacturing sites in the Netherlands, Germany and Great Britain.
A spokesperson for Nexperia told CNBC that the company had no further comment, but that it “complies with all existing laws and regulations, export controls and sanctions regimes” and remains in regular contact with relevant authorities.
The Netherlands’ move comes after Beijing on Thursday tightened its restrictions on the export of magnets and rare earth elements, which could hit the European auto industry.
The move could also further strain trade relations between China and the Netherlands, following years of restrictions on exports of advanced semiconductor manufacturing equipment from Dutch company ASML to China.
In 2023, the Netherlands had also investigated Nexperia’s proposal to acquire chip startup Nowi, although the deal was later approved.
