China 'firmly opposes' Dutch takeover of semiconductor manufacturer Nexperia
FILE PHOTO: A view of the main entrance of Nexperia owned site of microchip producer Newport Wafer Fab, Newport, Wales, Britain, November 22, 2022. REUTERS/Rebecca Naden
BEIJING: Beijing said on Thursday (Oct 16) it "firmly opposes" the Dutch government's seizure of Chinese-owned chipmaker Nexperia, arguing that the takeover "violates the spirit of contractual agreements and market principles".
Officials in the Netherlands invoked a Cold War-era law in late September to effectively take control of the Dutch-based company, citing national security concerns.
This means that while the company - a subsidiary of Chinese semiconductor firm Wingtech, based in the Dutch city of Nijmegen - can continue regular production, its decisions can be blocked or reversed by the Dutch government.
The Dutch government said the move was due to "recent and acute signals of serious governance shortcomings and actions" within Nexperia.
A spokeswoman for Beijing's commerce ministry said on Thursday that China "firmly opposes the Dutch side's attempt to expand the concept of national security and directly interfere in the internal affairs of enterprises".
The decision "not only violates the spirit of contractual agreements and market principles, but will also severely damage the Dutch business environment, harming both others and itself," He Yongqian said.
She said court documents showed the United States had meddled in Dutch legal procedures to remove Nexperia's Chinese CEO, though she did not give a detailed explanation of the claim.
In December, Washington put Wingtech on its so-called "entity list", which affects the company's ability to trade with US firms.
"We hope that the Netherlands will uphold its independence and self-reliance ... (and) correct its erroneous practices," He said.
Nexperia said it was seeking talks over the export restrictions in China and the United States.
In a statement on Tuesday, Nexperia said a court had ordered the suspension of CEO Zhang Xuezheng after concluding there were "valid reasons to doubt sound management". It added that a new interim CEO had been put in place.
The company also said Beijing had banned it from exporting certain goods from China since Oct 4.
Court documents later detailed a series of alleged improprieties by an executive who was not directly named but identified as the CEO.
The troubles at Nexperia have raised concerns over possible knock-on effects for Europe's automotive sector, with carmakers and their suppliers already battling tariffs, foreign competition and weak demand.
German automaker BMW said on Thursday that parts of its supplier network were being affected by the dispute.
"We are in close contact with our suppliers and continuously assess the situation in order to identify potential supply risks at an early stage and take appropriate measures if necessary," the spokesperson said in an emailed statement.
Production continues at BMW's plants as planned, he added, without giving details on the supplier problems.
Mercedes-Benz said it was monitoring the situation and in touch with relevant stakeholders, without giving further details. A spokesperson declined to say whether Nexperia was part of the company's supplier network.
Volkswagen said its production was unaffected and that it was in contact with stakeholders in order to respond to any risks if necessary.
Nexperia is one of the largest makers of basic chips used in cars and consumer electronics.
The Dutch government said on Sunday it had taken control of Nexperia, citing worries about the possible transfer of technology to Wingtech.
Nexperia chips are not technically sophisticated but are needed in large volumes. Its biggest manufacturing site is in Hamburg, Germany, but most of its chips are packaged and assembled into larger products in China.
