Nexperia’s parent stock rises 6% as Chinese government hints at easing tensions with Netherlands

shares of wing tech technologyNexperia, the parent company of chipmaker Nexperia, extended its gains on Monday after the Chinese government agreed to further talks with a Dutch delegation, easing concerns about a global car supply shortage.

Shares in Shanghai-listed Wingtech Technology soared as much as 6.4% on Monday after surging 9.7% in late trading last Friday on signs that the battle for control of Netherlands-based NExperia is winding down, according to LSEG data.

China’s Ministry of Commerce said in a statement on Sunday that it had taken steps to allow the export of certain chips from Nexperia’s facilities in China, while calling on the European Union to put pressure on the Dutch government to lift restrictions on the company.

In a separate statement on Saturday, the Chinese government said it had agreed to the Dutch government’s request to send a representative to Beijing for consultations and said it expected the Netherlands to propose “constructive solutions” and take “concrete actions” to quickly resolve the dispute over Neexperia.

The move followed a statement from Dutch Economy Minister Vincent Kalemans last Thursday in which he suggested Nexperia’s chips would reach customers in Europe and the rest of the world within the next few days, citing the “constructive nature of the discussions with the Chinese authorities.”

Karemans said China and the United States had told the Netherlands that supplies from Nexperia’s facilities in China would be resumed under a trade agreement signed last month. “This is also consistent with the information provided by the Chinese Ministry of Commerce and the European Commission,” he added.

The Dutch government took control of Nexperia on September 30, citing security concerns that the company would move operations to China, where its parent company Wingtech is based, and the Chinese government retaliated by blocking the export of parts from Nexperia’s Chinese facilities.

A dispute over ownership and control of Netherlands-based Nexperia has raised concerns about a global shortage of chips widely used in industrial, computing, mobile and consumer products.

like a car manufacturer volkswagen While warning of possible production risks; honda The company has lowered its annual profit forecast due to the suspension of production at several factories.

Including other major car manufacturers. Stellantissaid it has set up a “war room” to explore alternative purchasing methods to reduce disruption and is monitoring the situation 24 hours a day.

Neo Wang, China strategist at Evercore ISI, said the recent escalation in the dispute over Nexperia is a “direct result” of simmering tensions between Beijing and the United States.

In late September, the U.S. government expanded the Entity List, a U.S. trade blacklist for companies deemed to pose security or foreign policy risks, to include subsidiaries that are 50% or more owned by companies already on the list.

Nexperia is one of the subsidiaries of Zhejiang-based communications equipment maker Wingtech Technology Co., which was added to the list in December last year, Wang said.

China announced earlier this month that it would allow Nexperia’s Chinese unit to resume shipments to customers around the world, after a trade cease-fire was signed between Beijing and Washington on October 30 and both sides rolled back some restrictions.

Evercore’s Neo said “Beijing doesn’t seem willing to gamble on the bilateral relationship[with the Netherlands]” because the stakes are high, given the Dutch government’s control of ASML Holding, the world’s top supplier of advanced semiconductor manufacturing equipment.

ASML has become a major focus of the US-China conflict because of its unique technology, with the US government pressuring The Hague to restrict exports to China.

Suppliers have begun receiving chip shipments from China, according to a Saturday note from Barclays’ automotive and mobility analyst team led by Dan Levy. But analysts warned that chip inventory shortages could still cause disruption in the short term.

It added that the relief appears to be “temporary” as the core dispute between Nexperia’s Dutch headquarters and China-based operations remains unresolved.