Tensions between the West and China are reaching a new critical point. The Dutch government announced on Sunday the takeover of the semiconductor manufacturer Nexperia, a company majority owned by the Chinese group Wingtech, citing «serious governance deficiencies» and «direct risks to the economic security of Europe», reports the Financial Times. The Dutch Ministry of Economy stated that the decision was taken to protect the technological know-how and strategic capabilities on the Dutch and European territory, underlining the crucial importance of Nexperia in the supply chain of the automotive and consumer electronics industry in Europe. By invoking the Law on the Availability of Goods, the Dutch authorities obtained the right to block or cancel the decisions of the Nexperia management, in order to prevent «the risk that the company's products become unavailable in emergency situations». The decision was made on September 30, but made public only on October 12. Nexperia, founded in 2017 after spinning off NXP Semiconductors, was bought by a Chinese state-backed consortium for $2.75 billion, and in 2019 a majority stake was sold to Wingtech Technology, a former mobile phone maker turned strategic semiconductor player. Wingtech vehemently condemned the Dutch measure, accusing «excessive geopolitically motivated interference, not based on real risk assessments». The company warned that the decision goes against the principles of the market economy promoted by the European Union and appealed to the Chinese Government for diplomatic support. Wingtech shares collapsed on Monday with the maximum allowed on the Shanghai stock exchange: minus 10%. In parallel, three European directors of Nexperia appealed to the Court of Appeal in Amsterdam, requesting the suspension of the Chinese management. The court immediately decided to revoke the powers of the Chinese CEO Zhang Xuezheng and to appoint an independent, non-Chinese director with decisive voting rights in the management of the company. Also, all Nexperia shares, except one, will be placed under temporary fiduciary administration, pending an appointed administrator. Tensions between China and the West in the field of semiconductors have increased dramatically in recent months. Washington last year blacklisted Wingtech, accusing the company of helping Beijing obtain sensitive technology. New US regulations in September extend the bans to subsidiaries of listed companies, meaning Nexperia now falls under the same restrictions as its Chinese parent company. In response, China last week introduced drastic restrictions on the export of rare earths, materials essential for the production of chips, wind turbines and electric cars — a move seen as a direct response to Western pressure. The Netherlands' decision to intervene directly in a private company with Chinese capital signals a paradigm shift in Europe, where technological safety is beginning to take precedence over free market principles. «It's a clear message: cutting-edge technology is no longer just a business, but a matter of national security,» comments a European diplomat under the protection of anonymity.
For other news, analyses, articles and business information in real time, follow NV on WhatsApp Channels