The Dutch government announced on Wednesday (November 19) that it will temporarily suspend the intervention order on semiconductor manufacturer Nexperia after constructive talks with the Chinese side. This move has brought some relief to automobile manufacturers facing the impending chip shortages, indicating a de-escalation of tensions between China and the Netherlands over Nexperia, although supply chain issues have not been fully resolved.
Vincent Karremans, the Dutch Minister of Economic Affairs, stated in a release on Wednesday that this decision is a gesture of goodwill. The Dutch side supports the measures taken by the Chinese side to ensure the supply of chips to Europe and other regions worldwide, but he added that negotiations between the two parties will continue.
Meanwhile, European Trade Commissioner Maros Sefcovic welcomed this development, noting that it will contribute to stabilizing the supply chain.
Nexperia, headquartered in the Netherlands, was acquired by a Chinese tech company Wingtech. While Nexperia’s chip technology is not cutting-edge, it is widely used in automotive electronics and other consumer products.
Due to concerns of technology transfer to China, the Dutch government took over this Chinese-owned enterprise in September. Subsequently, Beijing announced restrictions on the export of chip products from Nexperia’s factories in China, particularly its main packaging facility. Some of these restrictions were later relaxed.
European automobile manufacturers and related suppliers such as BMW, Bosch, and Aumovio welcomed this development, though they believe it is premature to assess its impact. Mercedes-Benz and Volkswagen, on the other hand, declined to comment.
Most of Nexperia’s wafers are produced in Hamburg, Germany, then packaged in Dongguan, China, before being delivered to customers.
In a statement on Wednesday, Nexperia expressed its welcome for the constructive dialogue between the Dutch and Beijing governments to restore supply chain stability. However, it emphasized the need for active cooperation from Nexperia’s entities in China to fully restore the supply chain.
The statement mentioned that Nexperia’s Chinese subsidiary currently holds enough wafer and finished product inventory to sustain operations for several months. It clarified that if deliveries are delayed, the responsibility lies entirely with Nexperia China.
After the Dutch government’s intervention, Nexperia China announced that it would no longer follow directives from the European management team, with Wingtech overseeing its operations.
On October 26, Nexperia’s headquarters announced the suspension of wafer deliveries to Nexperia China, citing unpaid bills. However, it later clarified that wafer supplies were being continued directly.
Reportedly, Nexperia China is selling previously processed chip inventory, temporarily alleviating pressure on customers, but the standoff with the headquarters continues to threaten the chip supply chain.
Furthermore, a Dutch court ordered the removal of former Nexperia CEO and Wingtech founder, Haifeng Zhang, in October on grounds of alleged mismanagement.
A Wingtech spokesperson strongly denied these accusations and urged the Dutch government to cease involvement in the case, which was initiated by Nexperia’s European management team.
The spokesperson added, “The Dutch government should now submit a letter to the court clearly retracting its support for the lawsuit.”
Currently, Haifeng Zhang remains suspended, and the voting rights of Nexperia shares indirectly held by Wingtech are managed by a designated independent administrator.
A spokesperson for the Amsterdam Business Court stated that the next step in the legal proceedings will involve holding a formal investigation hearing regarding the mismanagement issue, with a date yet to be determined.