Dutch government prepared to suspend control over Nexperia

"The disruption is hitting car manufacturers particularly hard. European manufacturers such as Volkswagen are experiencing the direct consequences of the supply problem. Shares in parent company Wingtech rose by almost 10 percent on the Shanghai stock exchange after news of possible solutions. Volkswagen shares also climbed 1.3 percent in Frankfurt. The crisis at Nexperia is severely affecting the production chain because, although 70 percent of the chips are made in Europe, they are packaged and distributed in China."

"The Dutch government has indicated its willingness to suspend control over Nexperia as soon as chip exports resume. According to sources, the Netherlands can revoke the ministerial order that gave the government control powers if China resumes exports of essential components. Verification of resumed deliveries and resolution of financial issues between Nexperia and its Chinese operations are conditions for this."

"The situation arose in late September, when Karremans invoked a law granting the government authority over Nexperia's decisions. This led to Chinese export restrictions that threaten global automotive production. Recent revelations about possible chip knowledge leaks to China are at the root of the conflict. A Dutch court removed CEO Zhang Xuezheng from his position after he was accused of stealing British trade secrets and wanting to move production to China."

Nexperia's packaging and distribution from China halted, severely disrupting the automotive chip supply chain and hitting carmakers such as Volkswagen. Market reactions included a near 10 percent rise in Wingtech shares and a 1.3 percent gain for Volkswagen. The Dutch government invoked control over Nexperia and said it could suspend that control once Chinese chip exports resume, subject to verified deliveries and settled financial issues. Dutch officials describe talks with Chinese authorities as constructive and expect shipments to reach customers soon. The crisis followed allegations of technology theft and the removal of CEO Zhang Xuezheng, which triggered Chinese export restrictions.

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