The Chinese semiconductor company, SMIC, had its control over its Dutch subsidiary, Nexperia, frozen by Dutch authorities for a year. Analysts believe that this action by the Netherlands is related to the current tensions between the US and China. In dealing with systemic threats posed by the Chinese Communist Party, maintaining Western unity is a major direction.
The Dutch government cited security concerns as the reason for freezing SMIC’s subsidiary, Nexperia, which caused SMIC’s stock price to hit the limit down on October 13th.
Earlier reports indicated that Nexperia’s assets were frozen by the Netherlands, leading to the halt in trading of its parent company’s stock.
On October 12th, SMIC announced through the Shanghai Stock Exchange that its Dutch subsidiary, Nexperia, received orders and court rulings from the Dutch government, demanding no adjustments to its assets, intellectual property, business, and personnel for a year. SMIC temporarily lost control over Nexperia.
On the same day, SMIC released a statement asserting that the Dutch government froze Nexperia’s global operations under the pretext of “unsubstantiated national security concerns.” The company vowed not to succumb to external political pressure and initiated legal and diplomatic efforts to demand the immediate withdrawal of this “erroneous directive.”
According to Reuters, the Dutch government stated on October 12th that it intervened with Nexperia due to concerns that crucial technology could be transferred to SMIC, the Chinese parent company.
A spokesperson for the Chinese Ministry of Foreign Affairs, Lin Jian, expressed opposition on October 13th to the “broadening of the concept of national security,” advising against politicizing economic and trade issues.
Nexperia was formerly a division of the Dutch chip giant NXP Semiconductors, focusing on standard chip production. In 2017, Nexperia became an independent entity and was fully acquired by SMIC in 2019, now functioning as a wholly-owned subsidiary. Financial reports show that in 2024, Nexperia’s revenue was approximately 14.7 billion Chinese yuan, accounting for about one-sixth of SMIC’s total revenue for 2024.
While Nexperia does not produce complex or advanced chips, its mass production of standard chips serves as a fundamental component for all electronic products. With factories in Germany and the UK, it plays a crucial role in the supply chain for the European automotive industry.
Chinese affairs expert Wang He stated that the Netherlands is a country governed by the rule of law, and the government’s intervention was prompted by SMIC’s attempts to transfer crucial technology within its subsidiary, violating the initial acquisition agreement and Dutch national laws. Therefore, the Dutch government intervened and obtained a court ruling. This is significantly different from the political pressure exerted by the Chinese Communist Party on foreign companies within China.
He believes that this intervention is mainly due to the systemic threat posed by the Chinese Communist Party to the entire Western world. In the pivotal semiconductor industry, the Netherlands is a prime target for China. The Dutch national security review of foreign investments aligns with both the European Union and the United States.
Taiwanese economic expert Huang Shicong told Epoch Times, “I believe the Netherlands should also consider the United States’ position. Semiconductors are becoming increasingly important and have become a strategic priority for every country. This is a strategic move amid the US-China confrontation.”
Huang stated, “In the past, Germany has suffered significant losses to the Chinese Communist Party in sensitive technology control, including industries like robotics and automobiles. In recent years, Europe has realized the need to strengthen technology protection. Coupled with the US-China confrontation, the EU must cooperate with the US – this is a major trend.”
Regarding potential retaliation from Beijing, Huang expressed that while the Chinese Communist Party has taken a tough stance against the EU, they would likely not want to engage in simultaneous conflicts with both the EU and the US.
The Dutch intervention in Nexperia comes amidst the comprehensive escalation of the US-China tech war. The Chinese regime announced expanded rare earth export controls on October 9th and initiated an antitrust investigation against American chip giant Qualcomm on October 10th, also imposing port fees on US-flagged vessels.
Since the Biden administration imposed a chip ban on China in October 2022, the US’s sanctions against Chinese tech companies have undergone several significant upgrades, including key restrictions on chip manufacturing equipment exports and the introduction of a global control concept. On September 29th, the US Department of Commerce issued a major upgrade in sanction rules aimed at preventing companies under Chinese sanctions from accessing restricted US goods through their subsidiaries or foreign branches.