Dutch govt takes control of Chinese-owned Netherlands-based Nexperia: Here’s why

The Dutch government invokes the Goods Availability Act to take control of Chinese-owned Nexperia, citing governance flaws and national security risks.

The Dutch Minister of Economic Affairs announced that it has invoked the Goods Availability Act (Wet beschikbaarheid goederen) due to significant governance issues at the semiconductor manufacturer Nexperia.

Based out of Nijmegen, Nexperia specialises in the high-volume production of essential semiconductors, crucial components required by every electronic design.

In general, the act allows the Minister of Economic Affairs to intervene in companies under exceptional circumstances, such as threats to economic security and the supply of critical goods.

“Invoking the Goods Availability Act by the Minister is highly exceptional. Only due to the significant scale and urgency of the governance deficiencies at Nexperia has the decision been made to apply the Act,” says the Ministry of Economic Affairs.

Govt takes control of Nexperia

As a result, the Dutch government has taken control of Nexperia, a semiconductor company based in the Netherlands and owned by a Chinese firm.

The decision aims to make sure that Nexperia’s finished and semi-finished products remain available in case of an emergency.

This means, every Nexperia decision taken can be blocked or reversed by the Dutch government if they are seen as harmful to the company or its future in Europe.

This is meant to protect Nexperia’s important role in Europe’s semiconductor industry, says the government. 

“These signals posed a threat to the continuity and safeguarding of crucial technological knowledge and capabilities. Losing these capabilities could pose a risk to Dutch and European economic security,” says the Ministry of Economic Affairs.

While the statement did not explain why exactly the company’s operations were risky, NRC cited that Nexperia was planning to leak chip knowledge to China.

“According to insiders, there were indications that Nexperia was planning to leak chip knowledge to China. This would pose a threat to national and economic security,” NRC reports.

In fact, in 2023, ASML also accused a male employee (of Chinese origin) of stealing data about its technology.

Wingtech acquired Nexperia in 2018

In 2018, Wingtech Technology Co Ltd, the world’s largest smartphone contract manufacturer, acquired Dutch semiconductor firm Nexperia Holding.

This move has heightened tensions between Western countries and China over access to advanced technology, like semiconductors and important materials.

The announcement comes a few days after China announced strict limits on exporting rare earth elements, which are used in various products, including cars and wind turbines.

It’s worth mentioning here that Wingtech is on the US “entity list. Under the regulations, the US companies cannot export American-made goods to them without special approval.

Wintech’s response

FD.nl reports that Wingtech issued a statement expressing that the recent decision “represents excessive interference motivated by geopolitical bias rather than a risk assessment based on factual evidence.”

On the other hand, the South China Morning Post published a statement by Wingtech in a now-deleted WeChat post.

The company said, “This action seriously contravenes the European Union’s long-standing commitment to market economy principles, fair competition and international trade norms. We express our strong protest against such discriminatory treatment targeting Chinese-funded enterprises.”

Wingtech’s corporate filing stated that on October 1, Nexperia Semiconductor Holding, along with its Chief Legal Officer, Ruben Lichtenberg, Chief Financial Officer Stefan Tilger, and Chief Operating Officer Achim Kempe, asked the Amsterdam Enterprise Court to conduct an investigation and take temporary action.

However, on the same day, the court issued emergency rulings, which included suspending Zhang Xuezheng, Chairman of Wingtech, from his roles as Executive Director of Nexperia Holdings and Non-Executive Director of Nexperia.

A week later, on October 7, the court ordered the appointment of an independent, non-Chinese director, who would hold decisive voting power and represent Nexperia, says the report. 

As a result, the company said in stock exchange filings that it had appealed to the Chinese government for assistance and detailed the change in control at Nexperia.

Consequently, Wingtech’s shares plunged by 10 per cent on Monday. At the time of writing this story, the share price stands at 41.83 Yuan per share

In November 2022, Nexperia was not allowed to buy Newport Wafer Fab in the UK because of national security concerns about its ownership by Wingtech.

In 2024, due to pressure from the US, the Dutch government has also restricted ASML from selling advanced semiconductor manufacturing machines to China.