The Dutch government is prepared to suspend control over chipmaker Nexperia if China resumes chip exports.
This is according to Bloomberg, based on sources. The disruption is hitting car manufacturers particularly hard. European manufacturers such as Volkswagen are experiencing the direct consequences of the supply problem. Shares in parent company Wingtech rose by almost 10 percent on the Shanghai stock exchange after news of possible solutions. Volkswagen shares also climbed 1.3 percent in Frankfurt.
The crisis at Nexperia is severely affecting the production chain because, although 70 percent of the chips are made in Europe, they are packaged and distributed in China. According to its own warning, Nexperia could no longer guarantee the quality of products from China after October 13.
Constructive talks
The Dutch government has indicated its willingness to suspend control over Nexperia as soon as chip exports resume. According to sources, the Netherlands can revoke the ministerial order that gave the government control powers if China resumes exports of essential components. Verification of resumed deliveries and resolution of financial issues between Nexperia and its Chinese operations are conditions for this.
In a statement, Minister Vincent Karremans emphasizes the constructive nature of discussions with Chinese authorities. “Given the constructive nature of our talks with the Chinese authorities, the Netherlands trusts that the supply of chips from China to Europe and the rest of the world will reach Nexperia’s customers over the coming days.”
Political risks
The situation arose in late September, when Karremans invoked a law granting the government authority over Nexperia’s decisions. This led to Chinese export restrictions that threaten global automotive production.
Recent revelations about possible chip knowledge leaks to China are at the root of the conflict. A Dutch court removed CEO Zhang Xuezheng from his position after he was accused of stealing British trade secrets and wanting to move production to China.
The timing of a solution is crucial. If the Netherlands withdraws control over Nexperia, this could happen as early as next week. The willingness to make concessions illustrates the economic pressure that the disruption of chip supplies is exerting on both countries.