Navigating the Semiconductor Crisis: Dutch Government Reverses Course on Nexperia Amid Tensions with China

The Dutch government has decided to suspend its intervention with Nexperia, a chipmaker owned by Chinese company Wingtech, after engaging in constructive talks with China. This decision comes after initial actions in September due to concerns over the firm’s governance and potential impact on the European supply of semiconductors critical for industries like automotive. The suspension was announced after both countries recognized that tensions over trade and Beijing’s relationships with various nations, especially Russia, required diplomatic effort.

The initial intervention was triggered by serious governance issues linked to Nexperia’s former CEO, who was accused of mismanagement and the improper transfer of assets to foreign entities. The Dutch government had implemented actions under the Goods Availability Act, aimed at protecting the supply chain in case of emergencies related to semiconductor shortages.

Vincent Karremans, the economic affairs minister, expressed optimism about a resolution and praised China’s measures to ensure chip supply stability in Europe. This situation is particularly critical as Nexperia plays a vital role in chip supply for cars and consumer electronics, and any prolonged shortages could disrupt the global market significantly.

The reversal of the Dutch decision could help ease the recent strain between the European Union and China, which has been exacerbated by concerns over national security and the Chinese government’s previous actions regarding Nexperia. China acknowledged the Dutch move but emphasized that it was just a partial step towards resolving the semiconductor crisis, highlighting the ongoing issues of control over Nexperia and calling for a resolution that addresses deeper systemic challenges.

Wingtech has expressed intentions to contest the actions taken against it and has criticized the lack of substantial evidence against its management. They urge the Dutch government to backtrack on its court support to stabilize Nexperia’s operations, emphasizing that the continuity of the firm is essential for the economic security of the Netherlands and Europe.