After the Dutch government took control of Nexperia from its Chinese owner last week, the Chinese division is now instructed to disregard directions from the Netherlands.
The Chinese division of Dutch chip specialist Nexperia no longer needs to listen to headquarters. Local managers are now in charge, according to Bloomberg. The mutiny of the Chinese division is a direct result of the Dutch government’s intervention in the company’s management last week.
The Dutch Ministry of Economic Affairs took the drastic measure to take control of the Dutch company from owner Wingtech. Wingtech is a Chinese organization. They were allegedly planning to transfer chip technology to China, thereby harming Dutch and European interests. By sidelining Wingtech’s directors in the name of national security, the Netherlands incurred Beijing’s wrath.
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Dutch Government Takes Control of Nexperia
American Pressure
A drama was inevitable. China first rejected accusations of national security concerns and then decided to restrict exports from Nexperia’s factory in China. Eventually, the action proved to be at least partly inspired by pressure from the US. The American government had warned the Netherlands that Nexperia under Wingtech’s Chinese control would become subject to sanctions issued against that company.
In a next step, the Chinese factory opts for self-declared independence. The division is effectively a Chinese company and will now determine its own course. ‘External’ orders, de facto from the Dutch headquarters, no longer count.
Globally Active
Although Nexperia has its headquarters in Nijmegen, a significant part of the company’s activities are located in China. Chip assembly largely takes place in a factory in Guangdong. However, Nexperia operates globally, with production activities in Germany, the UK, and Malaysia, among others. The company doesn’t make highly advanced chips, but rather simpler designs that are important for the automotive industry, among others.
China is flexing its muscles and shows it’s not impressed by the Dutch move. Beijing states it’s open to de-escalation when the Netherlands corrects its ‘erroneous actions’. It seems unlikely that the Dutch government intends to back down.