The Netherlands’ government has taken control of chipmaker Nexperia due to concerns that the company’s former CEO, Zhang Xuezheng, was planning to dismantle European operations and move production to China. According to government sources, Zhang had planned to lay off 40% of the European staff and close a research and development facility in Munich. Additionally, he had allegedly transferred sensitive information, including chip designs and machine settings, from Nexperia’s Manchester plant in Britain to a Wingtech-owned facility in China.
The standoff between China and the Netherlands over Nexperia has significant implications for the global automotive industry. Carmakers in Europe, the US, and Japan have warned of potential production problems due to possible chip shortages. Volkswagen, BMW, and Mercedes-Benz are coordinating with suppliers to maintain production, while General Motors has expressed concerns about the potential impact on its production. Nexperia’s chips are considered basic but essential, and are used in large numbers in automotive electronic systems.
The Dutch government took control of Nexperia on September 30, citing governance issues. In response, China’s Ministry of Commerce restricted exports of the company’s products from the country on October 4. Despite most of Nexperia’s chips being manufactured in Europe, about 70% are packaged in China before distribution. The company’s Chinese division has begun operating independently and resumed sales to customers within China.
The Dutch government is confident that it can reach an agreement with China to reinstate Nexperia under a joint Dutch-Chinese structure. The situation is being closely monitored by the automotive industry, as any disruptions to chip supplies could have significant consequences for production. The Dutch government’s decision to take control of Nexperia reflects its concerns about the potential risks of Chinese ownership and control of critical technology companies. The outcome of this standoff will have significant implications for the future of the global chip industry and the automotive sector.