London – a tense standoff between China and the Netherlands over control of a key chipmaker has reached a turning point after Amsterdam suspended the controversial order that would have allowed taking control of the Chinese company Nexperia.
The threat of production shutdowns at automotive plants around the world was real, as Nexperia is a critical supplier of microchips for the global auto industry.
The Dutch government said it had suspended the order after constructive talks with Chinese authorities and would continue the dialogue with them.
Key steps by the Netherlands and their impact on global chip supply
Amsterdam took control of Nexperia at the end of September under pressure from the U.S. government, which had placed its Chinese parent, Wingtech Technologies, on the list of companies that pose a threat to national security. The CEO of Nexperia was also removed from his post by court order.
Last month Beijing halted shipments of Nexperia chips from China, raising fears that automakers in the United States and Europe could be left without components. Subsequently, China agreed to permit the export of chips that are critical to car manufacturing.
In light of the latest events I believe it is necessary to take a constructive step by suspending my order… regarding Nexperia, in close consultation with our European and international partners.
– Ministry of Economic Affairs of the Netherlands, Vincent Karremans
In the past few days we have held constructive meetings with Chinese authorities. We welcome the steps already taken by Chinese authorities to ensure chip supply to Europe and the rest of the world. We view this as a sign of goodwill.
– Ministry of Economic Affairs of the Netherlands, Vincent Karremans
The Ministry of Commerce of China welcomed Amsterdam’s decision, stating in a statement that it was “the first step in the right direction toward a proper resolution”.
– Ministry of Commerce of China
Another key step in stabilizing our strategic chip supply chains.
– Maroš Šefčovič
Nexperia is a critical supplier for the global automotive industry, providing about 40% of chips in the market segment covering transistors and diodes, according to TechInsights research.
The U.S. Department of Commerce placed Wingtech on the list of companies facing trade restrictions last December.
The Dutch government said last month that it had taken control of Nexperia, citing economic security considerations.
In turn, China had previously imposed export restrictions in early October, prohibiting Nexperia and its affiliated companies from exporting certain components manufactured in China.
After a high-level meeting between U.S. President Donald Trump and Chinese leader Xi Jinping at the end of last month, Beijing said it would allow exemptions from the recently imposed export controls on computer chips.
Olesya Dmytratskova prepared the material.