The Dutch government has recently taken over the control of the key chip supplier Nexperia, citing concerns over national security and technology transfer. This move led to the removal of the CEO, Zhang Xuezheng, by the Dutch authorities. Following this, the Chinese parent company of Nexperia, Wingtech, publicly demanded the reinstatement of Zhang Xuezheng as a necessary condition to lift the export ban imposed by China.
The controversy began in late September when the Dutch government, for the first time since 1952, invoked the Product Supply Law to seize control of Nexperia. Subsequently, the Amsterdam Court suspended Zhang Xuezheng from his CEO position on October 7.
Nexperia is a crucial low-cost chip supplier for the European automotive industry, with Zhang Xuezheng also serving as the CEO of Nexperia and its parent company, Wingtech. According to sources speaking to Dutch media outlets like NPR, Zhang Xuezheng planned to transfer Nexperia’s semiconductor production from the UK and Germany to Dingtao Jiaoxin Technology, a major Chinese automotive-grade chip project funded by the Shanghai government, and aimed to relocate patents and equipment to split the company and transfer the core European technology to China.
On Thursday, Wingtech stated to Bloomberg that they are exerting pressure on the Dutch government to revoke the decision and rebutted the allegations, stating that “Wingtech is the parent company and legal controlling shareholder of Nexperia, thus Wingtech has no need nor reason to ‘steal’ the subsidiary’s technology.”
Wingtech further emphasized that restoring full control and ownership over Nexperia and reinstating Zhang Xuezheng is a necessary condition for resolving the tense situation and restoring stability to the global supply chain.
After the double blow dealt to Zhang Xuezheng by the Dutch government, Beijing retaliated by banning the export of chips from Nexperia’s Chinese factories.
Despite the countermeasures taken by Beijing, the Dutch government stands firm on the legitimacy of its actions and asserts that Zhang Xuezheng’s behavior poses a “serious threat.”
A spokesperson from the Dutch Ministry of Economic Affairs stated that Zhang Xuezheng’s actions pose a significant threat to Nexperia’s production capacity, knowledge, and intellectual property continuity in Europe.
The Dutch authorities have also accused Zhang Xuezheng of “misusing financial resources to seek personal benefits for the CEO himself and his other companies in China.”
Furthermore, the Dutch government emphasized that the court’s suspension of Zhang Xuezheng’s duties was a result of an independent investigation and not a direct intervention by the government.