The Dutch government announced on Wednesday that it is suspending its intervention at chipmaker Nexperia following what it described as constructive talks with China over a dispute that has caused chip shortages for car manufacturers.
While the decision may reassure customers that tensions between China and the Netherlands over Nexperia are easing, supply chain challenges remain unresolved.
Even the dispute between Nexperia’s European headquarters and its Chinese parent Wingtech remains which was sparked by the Dutch state taking control of Nexperia on September 30.
The Dutch government said the move was needed to prevent Nexperia’s former CEO from moving its operations to China. Beijing responded by halting exports of Nexperia’s finished products on October 4, a measure it has since partly relaxed.
Dutch Economy Minister Vincent Karremans said on Wednesday that suspending the government intervention represented a gesture of goodwill, adding that talks will continue.
Impact on Automotive Supply Chains
Nexperia is a major supplier of basic computer chips to the car industry, and shortages have threatened automotive supply chains, leading to production slow downs and halts.
The company manufactures most of its wafers in Hamburg, Germany, and then sends them to Dongguan, China to be packaged and sent on to customers.
Stalemate Continues to Threaten Supplies
After the Dutch state intervention, Nexperia’s Chinese arm declared itself no longer subject to control by European management and on Oct. 26, the European side of the company stopped shipping wafers to it, citing non-payment.
That stalemate continues to threaten supplies, although the Chinese side is now selling down stockpiles of chips it has previously processed, offering temporary relief to customers.
Spokespeople for Nexperia and Wingtech, which oversees the Chinese operations, both said they were preparing reactions to Wednesday’s move by the Dutch government.
Separately, a Dutch court in October ordered the removal of ex-Nexperia CEO and Wingtech founder Zhang Xuezheng, citing alleged mismanagement.
Wingtech has said it will fight the decision.
The next step in the legal process will be hearings on a formal investigation into mismanagement, a spokesperson for Amsterdam’s Enterprise Court said.
No date has been set.
(With inputs from Reuters)
