A close-up of the Nexperia factory sign in Newport, Wales, April 1, 2022.
Matthew Horwood | Getty Images News | Getty Images
The Dutch government has taken control of Nexperia, a Chinese-based semiconductor manufacturer headquartered in the Netherlands, in an unprecedented move to ensure sufficient supply of chips in Europe amid heightened global trade tensions.
Neexperia is a subsidiary in China. wing tech technologyspecializes in the mass production of chips used in automobiles, consumer electronics and other industries, making it essential to maintaining Europe’s technology supply chain.
On Sunday evening, the Dutch Economy Minister announced that he had invoked the “Goods Availability Act” against Nexperia in September to “prevent a situation in which the products (finished and semi-finished products) produced by Nexperia become unavailable in an emergency.”
Following the announcement from The Hague, Wingtech plunged its daily cap of 10% on the Shanghai Stock Exchange.
The Availability of Goods Act, which allows the Hague to intervene with private companies to ensure the availability of critical goods in case of emergencies, has been used as the US-China trade war escalates.
A government statement said the “highly unusual” action was taken after the ministry observed “recent serious indicators of serious governance deficiencies and conduct” within Nexperia.
“These signals posed a threat to the continuity and protection of important technical knowledge and capabilities on Dutch and European soil. The loss of these capabilities could pose a risk to the economic security of the Netherlands and Europe,” it said, identifying motor vehicles as particularly vulnerable.
Governance changes
According to Google Translate, Wingtech acknowledged in a company filing dated Oct. 13 with the Shanghai Stock Exchange that NExperia is temporarily under external management and has been asked to suspend changes to its assets, operations and personnel for up to one year.
According to the filing, Wingtech Chairman Zhang Xuezheng was immediately suspended from his duties as a managing director of Nexperia Holdings and a non-executive director of Nexperia Inc. in response to the ministerial order.
Nexperia’s day-to-day operations will continue, the filing said, adding that the impact of the measures has not yet been quantified.
“The Dutch government’s decision to freeze Nexperia’s global operations under the pretext of ‘national security’ amounts to excessive intervention based on geopolitical bias rather than a fact-based risk assessment,” Wingtech said in a since-deleted WeChat post. This post was archived and translated by Chinese policy blog Peknology.
It added that since acquiring Nexperia in 2019, Wingtech has “strictly complied with the laws and regulations of all the jurisdictions in which it operates and maintains transparent operations and sound governance” and employs “thousands of local staff” through R&D and manufacturing sites in the Netherlands, Germany and the United Kingdom.
The Dutch move comes after the Chinese government tightened export controls on rare earth elements and magnets on Thursday, which could have an impact on Europe’s auto industry.
The move could also further strain trade relations between China and the Netherlands, following long-standing restrictions on Dutch company ASML’s export of advanced semiconductor manufacturing equipment to China.
The Netherlands was also investigating a proposed takeover of semiconductor startup Nowi by Nexperia in 2023, but the deal was later approved.
