Progress in chips crisis
The government in the Netherlands has agreed to relinquish control of the Chinese-owned chipmaker Nexperia to significantly de-escalate the crisis that has threatened to disrupt global car production.
The Dutch economic ministry announced this week it was suspending its intervention at the company after what it described as constructive discussions with China.
The Netherlands took over the chipmaker, which is based in the country, at the end of September amid concerns about actions by Wingtech Technology, the chipmaker’s owner.
Nexperia is the last manufacturer with European production capacity for so-called “legacy” chips. These are crucial in the automotive and consumer electronics sectors. Nexperia makes most of its wafers in Germany before despatching them to China to be packaged and sent to customers. China suspended exports of Nexperia chips.
China’s Commerce Ministry has welcomed the Dutch government’s decision of November, calling it a “first step in the right direction”.
It says the move falls short of what it had hoped for, which was a withdrawal of the administrative order that triggered the Dutch intervention. Beijing blamed this for causing disruption in semiconductor supply chains.
The European Union’s trade chief, Maros Sefcovic, says the move will help stabilise supply chains. “Continued constructive engagement with partners remains essential to securing reliable global flows,” he adds.
The European Automobile Manufacturers' Association says the developments signal “a welcome step” but adds the situation has yet to be resolved because continuity of supply remains a “critical short-term issue”.
BMW, Bosch and Aumovio opine it’s too early to judge what impact the Dutch government’s decision will have. “Production at our plants is continuing, but the situation remains volatile,” says a spokesman for BMW. “We welcome positive signals from the political sphere on this issue.”
The order that gave the Netherlands powers to block or revise decisions at Nijmegen-based Nexperia was dropped as “a show of goodwill,” says Vincent Karremans, Economic Affairs Minister, who adds discussions with Chinese authorities are continuing.
“The Nexperia group currently shows no signs of continuing the behaviour that prompted my order nor any intention to do so,” the minister says.
While the immediate supply squeeze is set to relax, longer-term issues remain. After car companies were forced to scramble for alternatives, Nexperia’s future role in the sector could be in doubt. And concerns about China’s ownership of the company goes back longer, with managers at the chipmaker approaching the Dutch government in late 2023.
Bloomberg reported earlier this month that the Netherlands was prepared to return control to Wingtech if chip exports from the company’s site in China could be confirmed. Karremans says there’s now “cautious optimism” supplies of Nexperia chips are flowing again.
