The Dutch government announced on Sunday its decision to intervene at Nexperia, a chipmaking company owned by Chinese firm Wingtech, citing a potential threat to both Dutch and European economic security. This extraordinary action reflects heightened tensions between the European Union and China, particularly in the backdrop of trade disputes and China’s connections with Russia.
In response to the government’s move, Wingtech indicated on Monday that it would take steps to protect its rights and seek assistance from the government. The development could have broader implications for relations between the EU and China, which have already become strained in recent months.
Nexperia has previously faced scrutiny when the UK government compelled the company’s sale of its silicon chip plant in Newport, Wales, due to national security concerns. Despite this, Nexperia continues to operate a facility in Stockport, UK.
The Dutch intervention was executed through the Ministry of Economic Affairs, which invoked the Goods Availability Act, allowing for government action in exceptional circumstances. This law serves to safeguard the nation’s economic security and ensure the availability of critical goods. Authorities expressed that they needed to mitigate the risk of Nexperia’s chips becoming unavailable during an emergency and emphasized the importance of maintaining crucial technological knowledge and capabilities on Dutch and European soil.
While the government reassured that Nexperia’s production could proceed as usual, no specific details were provided about the perceived risks associated with the company’s operations. A representative from the Ministry of Economic Affairs stated there was no further information available on the matter.
In the wake of the announcement, Wingtech’s shares, listed in Shanghai, dropped by 10% on Monday morning. The firm has also found itself on the US “entity list,” which restricts American companies from exporting goods to such businesses without special permission. Recently, the US commerce department had tightened restrictions further, expanding this list to include any company that is majority-owned by a Chinese entity.
