Dutch government seizes control of China-owned chipmaker amid trade tensions
What's the story
The Dutch government has taken control of Nexperia, a Chinese-owned semiconductor manufacturer. The decision comes as part of rising global trade tensions and national security concerns. The company is a major supplier of chips to the European automotive and consumer electronics industries. The intervention was announced by the Dutch Minister of Economic Affairs on Sunday.
Security concerns
Dutch government invokes 'Goods Availability Act'
The Dutch government has invoked the "Goods Availability Act" to place Nexperia under external management. This move is aimed at preventing a situation where goods produced by the company would be unavailable in an emergency. The decision comes amid rising trade tensions between the US and China, and days after Beijing tightened restrictions on rare earth element exports vital to European manufacturing.
Governance issues
Serious governance shortcomings at Nexperia, says Dutch government
The Dutch government has cited "recent and acute signals of serious governance shortcomings and actions" at Nexperia as a reason for its intervention. These issues, it said, posed a threat to the continuity and safeguarding of crucial technological knowledge and capabilities on Dutch and European soil. The move comes amid growing scrutiny of Chinese-owned companies operating in sensitive sectors such as semiconductors.
Market impact
Wingtech's shares fall by daily limit
Following the Dutch government's decision, Wingtech Technology Co.'s shares fell by their daily limit of 10%. The Chinese firm had acquired Nexperia in a $3.6 billion deal in 2019. Despite the intervention, Nexperia can continue regular production but its decisions can be blocked or reversed by the government. The Hague has also ordered Wingtech to suspend changes to Nexperia's assets, business, or personnel for up to a year.
Response
Wingtech condemns Dutch government's intervention
Wingtech has condemned the Dutch government's intervention, calling it an "excessive intervention driven by geopolitical bias, rather than a fact-based risk assessment." The Chinese parent company insists it has "strictly abided by the laws and regulations of all jurisdictions" and has maintained transparent operations across its sites in the Netherlands, Germany, and Britain.