Netherlands cracks down on Chinese-owned chip company over security risks
The Dutch government said on Sunday it had taken the “highly exceptional” decision to intervene in Chinese-owned chipmaker Nexperia over a “potential risk to Dutch and European economic security.”
Wingtech, the company’s Netherlands-based owner, said on Monday that it would take action to protect its rights and would seek government support.
This development threatens to raise tensions between the European Union and China, which have increased in recent months due to trade and Beijing’s relationship with Russia.
Nexperia has been forced to sell its silicon chip factory in Newport, Wales, after MPs and ministers expressed national security concerns. It currently has a UK facility in Stockport.
The Dutch government said Its Ministry of Economic Affairs invoked the Availability of Goods Act due to “acute indications of serious deficiencies in management” within Nexperia.
The law aims to allow The Hague to intervene in companies under exceptional circumstances. These threats include the country’s economic security and ensuring the supply of vital goods.
The Dutch government said that this intervention aims to prevent a possible situation in which Nexperia chips become unavailable in emergency situations.
It added that Nexperia’s operations pose a “threat to the continuity and protection of important technological know-how and capabilities on Dutch and European territory.”
She added that the company’s production can continue as usual.
Nexperia manufactures semiconductors used in automobiles and consumer electronics.
The government’s statement did not detail why it believed the company’s operations were risky. A spokesman for the Minister of Economic Affairs told the BBC that there was no further information to share.
The BBC also contacted the Chinese embassies in the Netherlands and Brussels.
Shanghai-listed shares in Nexperia’s parent Wingtech fell 10% on Monday morning.
Wingtech is among the companies listed by the United States on the so-called “Entity List.” Under the regulations, US companies are prohibited from exporting US-made goods to listed companies unless they obtain special approval.
In September, the US Commerce Department tightened its restrictions further, adding to the entity list any company majority owned by a Chinese company.