‘Show of goodwill’: Netherlands suspends Cold War-era act tied to Nexperia crisis
Crisis over Chinese-owned chipmaker eases a little but major doubts still hang over the future of a company at war with itself
In a statement on Wednesday, the Dutch economy minister said the government had held “constructive meetings with the Chinese authorities” in recent days and he was “positive about the measures already taken by the Chinese authorities to ensure the supply of chips to Europe and the rest of the world”.
The Nexperia crisis erupted in September when Dutch authorities used the act to ring-fence company assets in Europe, preventing them from being relocated to China.
Nexperia produces around 100 billion semiconductors in Europe every year and an estimated 70 per cent of the wafers then go to Dongguan in southern China for testing and packaging, before being shipped to clients as legacy chips.
Within days of the act being invoked, Beijing responded by restricting the shipment of Nexperia products from the company’s facility in China.
Tensions escalated further that week when a Dutch court ousted the company’s Chinese ownership and placed interim management in charge.
This led to a global shortage of Nexperia’s legacy chips – vital to the production of cars across the world – and a diplomatic scramble to resolve the affair.
As stocks dwindled, car companies and parts makers idled production and The Hague came under pressure not only from China but also from around Europe and across the industrial supply chain to take action.
The Dutch government’s move on Wednesday will unlock a ban on transferring assets and intellectual property that kicked in when Karremans’ ministry used the Goods Availability Act for the first time on September 30. It will not, however, restore Zhang Xuezheng to his former position as CEO of the company, since he was removed by an independent court in Amsterdam.
A spokesman for parent company Wingtech called on the Dutch government to “withdraw from a court case alleging mismanagement at the firm”, Reuters reported on Wednesday.
Documents disclosed by that court painted a dramatic picture of a years-long geopolitical tussle over Nexperia’s ownership, with the United States pressuring the Dutch government to remove the Chinese management.
Nexperia was bought in 2019 by Wingtech, which was added to Washington’s entity list in late 2024. If not action was taken, the US warned that it would add Nexperia to the blacklist.
Karremans’ order in September to invoke the act was issued on the same day that the US expanded the entity list to include Nexperia’s operations in Malaysia and the Philippines. Its European arm was given a stay of execution until late November. But after the China-US summit in Busan on October 30, the expansion of the entity list was paused for a year.
Nonetheless, the dispute has simmered ever since.
In an interview with the Guardian last week, Karremans said he had no regrets over the act’s invocation.
He added that he would do the same thing again if he had to, prompting yet further outrage from China’s Ministry of Commerce.
In the meantime, the Chinese and Dutch arms of the company remain at war, raising question marks over Nexperia’s future viability.
The two sides of the business released furious statements last Friday, each accusing the other of stoking the crisis and corporate malpractice. Nexperia Europe is offering to ship wafers directly to its clients, bypassing Nexperia China, and accuses Dongguan of refusing to pay for wafers already shipped.
Nexperia China, meanwhile, slammed management in Nijmegen, the Netherlands, for “maliciously sabotaging Nexperia China’s production and operations” by suspending wafer supplies, casting doubt on the quality of its products and failing to provide agreed-upon funding and support.
Nonetheless, car companies said this week that the chips were beginning to flow again.
On Tuesday, Honda Motor said it would gradually resume normal operations at its North American vehicle assembly plants from next week, suggesting that the production disruptions were subsiding.
EU sources say they are satisfied that the worst-case scenario has been averted, but still do not know how the company’s future will be resolved.
The interconnectedness of the Chinese and European arms is seen as a major barrier to economic security, given the complete reliance of Europe’s car industry on Nexperia chips.
With Beijing also restricting exports of rare earth minerals this year, discussions on how to reduce the EU’s dependencies have been turbocharged. The bloc plans to launch a new law targeting critical minerals before the end of the year.
On Wednesday, its industry chief told the Financial Times that the EU would create a central body to coordinate the purchasing and stockpiling of critical minerals to stop the US buying up global supplies from “under our noses”.
In Europe, the fear is that it could be left behind in a global rush to diversify away from Chinese supplies.