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The Dutch government has suspended its intervention in chipmaker Nexperia, restoring control to its Chinese owner in a bid to ease tension with Beijing and a potential global shutdown of car plants.
In a statement on Wednesday, Dutch economic affairs minister Vincent Karremans said the government was taking the step following “constructive” discussions with the Chinese government.
“We are positive about the measures already taken by the Chinese authorities to ensure the supply of chips to Europe and the rest of the world. We see this as a show of goodwill,” Karremans said.
European trade commissioner Maroš Šefčovič welcomed the Dutch decision as “another key step in stabilising our strategic chip supply chains”.
Nexperia is based in the Netherlands and has been majority-owned by Chinese technology group Wingtech since 2019.
The Dutch government in October seized control of Nexperia and forced out the Chinese chief executive, sparking supply chain disruptions in car manufacturing and other industries.
It said it had to act against Zhang Xuezheng, also the main shareholder of Wingtech, because of “serious governance shortcomings”.
The latest Dutch government move will not return him to office as European executives are running the company and an Amsterdam court is overseeing its management.
Wingtech called on the Dutch economy ministry to withdraw its support for legal proceedings to remove Xuezheng. “Wingtech strongly rejects these accusations [of governance shortcomings] and points out that, to date, no proof has been provided,” the company said.
Nexperia makes basic low-margin chips that are widely used in cars to control everything from lighting and airbag systems to locks and windows. Key chip components are made in the UK and Germany but are sent to China for assembly and then re-exported.
While Beijing recently agreed to lift export restrictions — imposed after the Dutch intervention — Nexperia’s Dutch operations had not been sending chips to its Chinese subsidiary for assembly as hostility between the two sides continued, according to car industry officials.
The Chinese facility had stock to last until early December but industry officials had warned of “devastating” chip shortages if the problem was not resolved.
Supply shortages have already started to have an impact. Nissan said on Tuesday that it was making “production adjustments” while Bosch said there were disruptions at two of its plants in Germany and one in Portugal.
More than two-thirds of Bosch’s 3,300 workers at its plant in Braga, Portugal, had been affected by “temporary adjustments to working hours or furloughs”, the company said while staff at the sites in Germany had been stood down.
Bosch said the chip supply situation presented “significant challenges” but that it was working to try to minimise the impact on production.
BMW on Wednesday welcomed “the positive signals from the political space” but cautioned that the situation remained volatile.
The Dutch move follows a visit by officials to China to try to smooth relations.
