Chip manufacturer seized by Dutch government cuts ties with China

According to reports in the national press, Nexperia sent an information note to customers of its Chinese unit.

The memo stated that the company's European headquarters had cut off access to its employees' computers in China and suspended salary payments. The memo also expressed deep surprise and disappointment at the decision. The memo noted that the unit had been under "relentless" pressure for some time and that the current management was apparently preparing to abandon the Chinese market.

On the other hand, it was emphasized that Nexperia's China unit took recovery measures to maintain service to customers in the country and established a local supply chain for this purpose.

The Dutch government seized the company

The Dutch government took control of Nexperia, of which it had become the controlling partner after acquiring a majority stake from the Chinese company Wingtech Technology in 2019, by seizing control of the company's operations earlier this month.

When the company's Chinese CEO Cang Shueching was dismissed, the government cited "serious management problems and urgent signs of these" as the reason for seizing control.

The government's statement read, "These signals threatened the continuity of know-how and production capacity for critical technologies in the Netherlands and Europe. Losing these capabilities could pose a risk to the economic security of the Netherlands and Europe. This decision aims to prevent goods produced by Nexperia from becoming unusable in an emergency."

Nexperia's former CEO, Frans Scheper, commented that the Dutch government was considering seizing operations on the continent out of concerns that the company would move its European chip production to China.

The Dutch move follows the US export control regulation.

The Dutch government's move follows the US decision to include subsidiaries in which it holds a 50% stake in companies on the "Entity List" subject to export controls.

Wingtech was placed on the Entity List by the Washington administration in December 2024.

The Dutch government announced that it would impose temporary control measures on the company one day after the rule came into effect on September 30, and subsequently took over the company's management completely.

The Dutch company is known as a key supplier to major companies in the field of electric vehicles and consumer electronics, such as Tesla and Apple.

CHIP AND SOFTWARE VOLTAGE

The government, led by former US President Joe Biden, has made preventing the transfer of key technologies that could threaten national security central to its strategy to compete with China.

The Chip and Science Act, which came into force on August 10, 2022, with Biden's approval, revealed Washington's intention to curb China's technological capability in this sector with the restrictions it imposed on Chinese manufacturers' access to advanced chip technologies.

The Bureau of Industry and Security (BIS), affiliated with the US Department of Commerce, reported on October 7, 2022, that 31 companies and institutions, including China's major memory chip manufacturer Yangzte Memory Technologies and major semiconductor hardware manufacturer Naura Technology Group, were included in the Export Control List.

On the other hand, in addition to export restrictions, Biden, with the presidential executive order he signed on August 10, 2023, on the anniversary of the passage of the Chip and Science Act, restricted American companies from making venture capital and equity investments in China in three critical technology areas: semiconductors and micro-electronics, quantum information technologies, and artificial intelligence systems.

The Biden administration last announced on December 2, 2024, that export restrictions had been imposed on 24 types of chip manufacturing hardware and 3 categories of software used in the development of semiconductors to China.

The Trump administration, which came to power at the beginning of this year after Biden, maintained the previous administration's chip restrictions on China, while also imposing controls on the export of artificial intelligence chips and halting the sale of software used in chip design to China.