Dutch Government Suspends Control Over Nexperia After Talks With China, But Supply-Chain Dispute Persists

The Dutch government announced on Wednesday that it is suspending its intervention in semiconductor manufacturer Nexperia. The decision follows constructive discussions with China after tensions between the two countries triggered shortages of essential chips for automakers.

While the move offers some relief to customers hoping for a de-escalation between China and the Netherlands over Nexperia, the underlying supply-chain problems remain unresolved.

The dispute between Nexperia’s European headquarters and its Chinese parent company, Wingtech (600745.SS), also continues. It began on September 30, when the Dutch state moved to assume control of Nexperia.

According to the Dutch government, intervention was necessary to prevent the company’s former CEO from shifting core operations to China. Beijing retaliated on October 4 by halting exports of Nexperia’s finished products, a measure it later partially relaxed.

Dutch Economy Minister Vincent Karremans said on Wednesday that suspending the intervention is intended as a gesture of goodwill, adding that dialogue with Chinese authorities will continue.

“We are encouraged by the initial steps taken by Chinese officials to help safeguard the supply of chips to Europe and the rest of the world,” he said in a statement.

Nexperia is a key supplier of basic semiconductors for the automotive industry, and the shortage has disrupted supply chains, slowing or halting vehicle production.
The company produces most of its wafers in Hamburg, Germany, then sends them to Dongguan, China, for packaging before distribution to customers.

Standoff Still Threatening Supplies

After the Dutch intervention, Nexperia’s Chinese division declared it was no longer under the authority of European management. On October 26, Nexperia’s European arm halted wafer shipments, citing lack of payment.

The impasse continues to threaten supply, although the Chinese side has begun selling previously processed chip inventory to provide temporary relief to customers.

Spokespersons for both Nexperia and Wingtech, which oversees the Chinese operations, said they are preparing responses to the Dutch government’s latest decision.

Separately, in October, a Dutch court ordered the removal of Nexperia’s former CEO and Wingtech founder Zhang Xuezheng, citing suspected mismanagement.
Wingtech has indicated it will challenge the ruling.

A spokesperson for Amsterdam’s Enterprise Court said the next step in the legal process will be a hearing on a formal investigation into the alleged mismanagement.