The Government of the Netherlands took control of the semiconductor manufacturer Nexperia, owned by Chinese capital, to guarantee the supply of ‘chips’ essential to the automotive and consumer electronics industry in Europe.
For the first time, the Ministry of Economy invoked the Goods Availability Law, alleging “a threat to the continuity and safeguard, on Dutch and European soil, of technological knowledge and crucial capabilities”.
A The move comes amid growing tensions between Western countries and China over access to advanced technologies and critical raw materials.
On Thursday, Beijing imposed new restrictions on the export of rare earths, used in products such as automobiles or wind turbines.
A Nexperia is a company based in the Netherlands, but belongs to the Chinese Wingtech, listed on the Shanghai Stock Exchange and included by the US administration in the “entity list”, which implies that US companies need a license – usually difficult to obtain – to do business with the group.
According to the Dutch ministry, the The decision was based on “serious failures of governance and actions within Nexperia”. The objective is to prevent the ‘chips’ produced by the company from becoming “unavailable in case of emergency”.
Nexperia supplies, among others, semiconductors for the European automotive industry and for consumer electronic devices.
The Dutch Ministry of Economy revealed that it intervened on September 30, but only made the decision public on Sunday.
From that moment on, the Minister of Economy, Vincent Karremans, now has the power to reverse or block decisions made by the company’s board of directors.
In reaction, Wingtech classified the measure as “excessive interference motivated by geopolitical prejudices, and not by an objective risk assessment”.
“This decision seriously contradicts the European Union’s long-standing defense of the principles of market economy, fair competition and international trade standards”, highlighted Wingtech, which protested against what it considered to be “discriminatory treatment” of a company with Chinese capital.
Hours before the public announcement, Wingtech filed statements with the stock exchange regulator, revealing that the Dutch government had ordered Nexperia and all its subsidiaries not to change their assets, intellectual property, operations or personnel for one year.
By order of the Amsterdam Court of Appeal, the Dutch executive also managed to suspend Zhang Xuezheng from his duties as executive director of Nexperia and non-executive director of the holding company Nexperia Holding.
An independent, foreign, judicially appointed director, with voting and representation powers, will now join both companies.
Furthermore, all Nexperia shares – except one – were placed under fiduciary management, by a person responsible yet to be appointed.
The Hague decision follows the inclusion in September of hundreds of subsidiaries of Chinese companies on the US “entity list”.
According to the US Department of Commerce, companies with more than 50% Chinese capital on this list are automatically included in the ban.
China’s Ministry of Commerce cited these sanctions as one of the justifications for recent rare earth export restrictions.
Nexperia, headquartered in Nijmegen and with a global presence, has guaranteed compliance with “all applicable laws and regulations, export controls and sanctions regimes”.
In November 2022, the United Kingdom blocked Nexperia’s acquisition of semiconductor manufacturer Newport Wafer Fab, citing national security concerns due to the Dutch company’s link to Wingtech.
Under pressure from Washington, The Hague had already imposed limits on the sale, by the Dutch ASML, of advanced semiconductor manufacturing machinery to China.