Dutch government takes control of Chinese-owned chipmaker Nexperia in ‘exceptional’ move

In a significant move, the Dutch government has announced its decision to take control of Nexperia, a prominent chipmaker based in the Netherlands. This intervention arises from concerns regarding the potential transfer of critical technologies to Nexperia's parent company, Wingtech, based in China. The announcement sent Wingtech's shares tumbling by 10% in Shanghai on Monday. In response, the company has stated that it is seeking legal counsel and government assistance to safeguard its rights and interests. According to the Dutch Ministry of Economic Affairs, this intervention is deemed 'exceptional' and is a reaction to alarming signals indicating severe administrative failures within the company. With this government oversight, authorities can now reverse or obstruct management decisions perceived as detrimental to the company's integrity. However, Nexperia's regular operations will continue uninterrupted. The ministry emphasized that these administrative issues could jeopardize the preservation of vital technological expertise and capabilities in the Netherlands and Europe, which are crucial for economic security. In a stock market announcement, Wingtech disclosed that its control over Nexperia will be temporarily curtailed due to the Dutch government's orders and court rulings, impacting the company's decision-making processes. Following a court order in Amsterdam on October 6, Nexperia's chairman, Zhang Xuezheng, has been suspended from the board, with plans to appoint an independent non-Chinese individual to take over his voting rights. A representative from Nexperia affirmed the company’s commitment to adhering to all relevant laws, regulations, export controls, and sanctions, but declined to provide further comments. Nexperia stands as one of the largest producers of basic computer chips, including diodes and transistors, while also innovating in advanced technologies aimed at enhancing battery efficiency. Wingtech acquired Nexperia for approximately $3.63 billion in 2018, when it was still part of the Dutch conglomerate Philips. The company's inclusion on the U.S. 'entity list' in December 2024 raised national security alarms, though Nexperia maintained that its operations are distinct from Wingtech's influence. Recently, the U.S. expanded its entity list rules to automatically encompass subsidiaries with majority ownership by listed companies, though it remains unclear if this development is related to the Dutch government's actions, especially as both nations coordinate closely on chip industry export controls.