Nexperia chipmaker control may return to China

The Dutch government may return control of Chinese-owned chipmaker Nexperia to its owners after China resumed critical semiconductor supplies. According to sources cited by Bloomberg, the Netherlands seized the Dutch-based company last month, citing risks to the European Union’s economic and technological security. The move was made under a rarely used emergency law, prompting China’s Wingtech Technology, which owns Nexperia, to condemn the intervention as “excessive interference driven by geopolitical bias.”

In response, Beijing restricted Nexperia’s exports from China, which account for about half of the company’s total output. This led to production cuts at several European auto plants, affecting manufacturers such as Volkswagen, Stellantis, and BMW. However, the Dutch government has reportedly said that it expects Nexperia’s Chinese unit to resume chip supplies in the coming days, following “constructive” talks with Beijing.

China’s Commerce Ministry has effectively lifted the export ban on Nexperia, according to Philipp von Hirschheydt, chief executive of Aumovio SE, a parts supplier for several major automakers. His company has already received an export license and shipped Nexperia-made semiconductors and components to clients. Other manufacturers, including Honda and Bosch, have also reported that shipments have resumed, allowing disrupted production to gradually restart.

The production of semiconductors is a sensitive area due to their critical role in global technology and security, with both civilian and military uses. The Dutch takeover of Nexperia came amid escalating global trade tensions between China and the European Union, with the EU accusing Beijing of dumping certain key goods and industrial overproduction. China has retaliated by tightening export controls on rare earth elements and magnets, which could further hurt the EU’s struggling auto industry.

The dispute highlights the complexities of global trade and the interconnectedness of the technology sector. The US, which is also locked in a trade dispute with China, reportedly pressured the Dutch authorities to take control of Nexperia. As the situation continues to unfold, it remains to be seen how the Dutch government will proceed with regards to Nexperia’s ownership and operations. The resumption of semiconductor supplies is a positive development, but the underlying tensions between China, the EU, and the US are likely to persist.