A close-up of the sign at the Nexperia factory in Newport, Wales on April 1, 2022.
Matthew Horwood | Getty Images News | Getty Images
The Dutch government has taken control of Nexperia, a Chinese semiconductor manufacturer based in the Netherlands, in an extraordinary move to ensure an adequate supply of its chips remains available in Europe amid rising global trade tensions.
Nexperia, a subsidiary of China Wingtech technologyspecializes in the large-scale production of chips used in automotive, consumer electronics and other industries, making it critical to maintaining Europe's technology supply chains.
On Sunday evening, the Dutch Minister of Economic Affairs announced that in September she had invoked the 'Act on the Availability of Goods' against the company to 'prevent a situation in which the goods (finished and semi-finished products) produced by Nexperia would no longer be available in the event of an emergency.'
Following the announcement from The Hague, Wingtech lowered its maximum daily limit from 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 emergencies. Its use comes amid escalations in the US-China trade war.
The government statement said that this “very exceptional” step was taken after the ministry observed “recent and acute signals of serious shortcomings and actions” within Nexperia.
“These signals posed a threat to the continuity and protection on Dutch and European soil of crucial technological knowledge and capabilities. The loss of these capabilities could pose a risk to Dutch and European economic security,” the report said, identifying the automotive sector as particularly vulnerable.
Changes in management
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 a year, according to a Google translation.
Wingtech Chairman Zhang Xuezheng was immediately suspended from his role as executive director of Nexperia Holdings and non-executive director of Nexperia following the ministerial decision, the filing showed.
The filing added that Nexperia's daily operations will continue, with the impact of the measures not yet quantifiable.
“The Dutch government's decision to freeze Nexperia's global operations under the pretext of 'national security' constitutes an excessive intervention driven by geopolitical bias, rather than a fact-based risk assessment,” Wingtech said in a deleted WeChat post, which was archived and translated by Chinese policy blog Beijingnology.
It added that since acquiring Nexperia in 2019, Wingtech has “strictly complied with the laws and regulations of all jurisdictions in which it operates, while maintaining transparent operations and good governance,” and employs “thousands of local staff” through R&D and manufacturing sites in the Netherlands, Germany and Great Britain.
The Netherlands' move comes after Beijing on Thursday tightened restrictions on the export of rare earth metals and magnets, which could impact the European car industry.
The move could also further strain trade ties between China and the Netherlands, after years of restrictions on exports of advanced semiconductor manufacturing equipment to China by Dutch company ASML.
In 2023, the Netherlands had also investigated Nexperia's proposed acquisition of chip company startup Nowi, although the deal was later approved.
