Dutch government suspends intervention at Nexperia to please China

Secretary Vincent Karremans of the Department of Economic Affairs has decided to suspend his order to take control of chip manufacturer Nexperia. He says it’s an olive branch to the Chinese government.

“In light of recent developments, I consider it the right moment to take a constructive step by suspending my order under the Goods Availability Act regarding Nexperia, in close consultation with our European and international partners,” Karremans says in a public statement.

“In the past few days, we have had constructive meetings with the Chinese authorities. We are positive about the measures already taken by the Chinese authorities to ensure the supply of chips to Europe and the rest of the world. We see this as a show of goodwill. We will continue to engage in constructive dialogue with the Chinese authorities in the period ahead,” the Secretary continues.

Back in September, the Dutch Department of Economic Affairs invoked the Goods Availability Act to take control of Nexperia. The Secretary had concerns regarding “serious governance shortcomings and actions.” These involved improper transfer of product assets, funds, technology, and knowledge to a foreign entity.

For example, Nexperia CEO Zhang Xuezheng was engaged in a conflict of interest and tried to dismiss three critical, non-Chinese board members.

“These signals posed 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,” Karremans said at the time.

Wingtech, the owner of Nexperia, accused the Dutch government of staging a coup. In response, China blocked the export of chips from its Nexperia’s factory.

Due to the export ban, both car manufacturers and their suppliers were left in uncertainty for weeks about their stocks and new deliveries.

To discuss the issue, Dutch officials traveled to China this week. According to Secretary Karremans, they had constructive meetings with the Chinese authorities. The fact that China announced that it would make exceptions to the export ban earlier this month played a major role in the Secretary’s decision to suspend the government’s intervention at Nexperia.

In a letter addressed to the House of Representatives of the Netherlands, the Minister says he’s confident that China will continue to issue export licenses and that the chips will actually be delivered. He also no longer sees any immediate danger of Nexperia moving its chip production to China. This is because the Amsterdam Court dismissed Nexperia’s CEO at the beginning of October.

According to Dutch news outlet NOS, the suspension of Karremans’ decision does not mean that the intervention has been completely reversed. The Secretary can reinstate the measure at a later date. This would allow him to regain control over important decisions made by Nexperia that could jeopardize chip production.