The Dutch government takes control of Chinese-owned chipmaker Nexperia

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The Dutch government has taken control of Nexperia, a Chinese-owned semiconductor manufacturer based in the Netherlands, in an attempt to ensure enough of its chips remain in Europe to make cars and consumer electronics.

The Ministry of Economic Affairs said in a statement that it was the first time that The Hague had used the Availability of Goods Act due to “a threat to the continuity and protection of vital technological knowledge and capabilities on Dutch and European territory.”

Nexperia is owned by Wingtech, a Chinese-listed company that Washington has placed on its “Entity List,” meaning US groups need a license, which is usually very difficult to obtain, to deal with it.

This step leads to escalation of frictions between Western countries and China Access to advanced technology Such as advanced semiconductors and important raw materials.

Thursday in China Sweeping restrictions were put in place On exports of rare earths used in products from cars to wind turbines.

The Dutch ministry’s statement said it took this action due to “serious deficiencies in governance and procedures within Nexperia.”

“The decision aims to prevent a situation in which goods produced by Nexperia (finished and semi-finished products) become unavailable in emergency situations,” she added. “Nexperia produces, among other things, chips used in the European automobile industry and in consumer electronics.”

Vincent Karremans, Minister of Economy, can now block or cancel decisions taken by the Nexperia Board of Directors. His administration took action on September 30 but did not announce its action until October 12.

Wingtech, which took a controlling stake in Nexperia in 2019, said in a statement that the decision “constitutes an act of excessive intervention driven by geopolitical bias, not a fact-based risk assessment.”

“This move seriously contradicts the EU’s long-standing defense of the principles of market economy, fair competition and international trade standards.

“We strongly protest this discriminatory treatment towards a Chinese-owned company.”

Hours before the announcement on Sunday, Wingtech filed with the stock exchange detailing the changes in control.

It said that on September 30, the Dutch government issued an order requiring Nexperia, its subsidiaries, subsidiaries and global offices not to make any modifications to its assets, intellectual property, business operations or employees for one year.

The government subsequently obtained an order from the Amsterdam Court of Appeal suspending Zhang Xiuzheng from his position as CEO of Nexperia and a non-executive director of Nexperia Holdings, its holding company.

The court ruled that a foreign independent director appointed by the court and who has decisive voting power and independent representation rights should join the two companies.

It also said that all but one share in Nexperia would be placed under receivership by a designated individual, who has not yet been named, for management purposes.

The Dutch move follows a decision by the United States last September to place subsidiaries of hundreds of Chinese companies on the Entity List.

The US Commerce Department said last month that groups that were more than 50 percent owned by Chinese companies on the Entity List would be automatically added to the blacklist. On Saturday, the Chinese Ministry of Commerce listed the US action as one of the reasons for imposing restrictions on rare earth elements.

Nexperia is headquartered in Nijmegen but has branches all over the world. The company said it “complies with all current laws, regulations, export controls and sanctions regimes.”

In November 2022, Nexperia has been blocked from purchasing Newport Wafer Fab In the UK due to national security concerns related to the Dutch owned company Wingtech.

Under US pressure, The Hague has already restricted Dutch group ASML’s sale of advanced semiconductor manufacturing machines to China.

The ministry said its latest action was not “directed at other companies, the sector or other countries” and that “parties may file an objection to this decision before the courts.”