Netherlands takes control of Chinese-owned chipmaker

Wingtech Technology, a leading Chinese semiconductor company, has faced major cross-border regulatory challenges. Its core asset, a subsidiary called Nexperia, based in the Netherlands, was frozen for a year from September 30 due to requests from the Dutch government , including asset and intellectual property adjustments.

At the same time, some foreign executives at Nexperia even asked the court to investigate the company and suspend the CEO appointed by parent company Wingtech Technology.

Nexperia company in the Netherlands was acquired by Wingtech (China) from Semiconductors.

The Dutch side also requested the appointment of a foreign director with voting rights and the transfer of all Nexperia shares (except one share) to a person to be named and announced later.

The Financial Times bluntly stated that the Dutch government's move will increase tensions between Western countries and China in the high-tech sector.

Bloomberg and other media outlets also warned that this unusual move would further increase tensions between China and Europe.

Wingtech Technology issued a statement on the evening of October 12, solemnly pointing out that the Dutch government's freezing of Nexperia's global operations on the grounds of "national security" is an excessive interference based on geopolitical bias. Wingtech Technology strongly opposes this discriminatory behavior against Chinese companies.

Nexperia, headquartered in Nijmegen, the Netherlands, is Wingtech Technology's core semiconductor business, specializing in discrete devices and logic devices, public information shows.

Nexperia manufactures semiconductor chip products used in consumer devices.

Formerly a division of NXP Semiconductors, the company became an independent business in 2017 and was fully acquired by Wingtech Technology in 2019.

Currently, the company is a wholly owned subsidiary of Wingtech Technology. In 2024, Nexperia's revenue is expected to reach about 14.7 billion yuan, accounting for about one-sixth of Wingtech Technology's total revenue that year.

Wingtech stressed to the media that the core reason behind the Dutch Ministry of Economic Affairs ' directive is to "ensure supply chain security." However, Wingtech believes that the broad scope and strict restrictions of the directive go far beyond normal risk management, representing an entirely unreasonable outside takeover for a normally operating company.

The Dutch Ministry of Economic Affairs said in a statement on October 12 that this is the first time the Dutch government has invoked the Goods Supply Act because "the continuity and security of important technological knowledge and capabilities in the Netherlands and Europe are at risk."

The statement argued that another reason for taking this action is that Ansem "has serious shortcomings in internal governance and problematic behavior." "This decision is aimed at preventing the risk that in the event of an emergency, products (finished and semi-finished products) manufactured by Ansem Semiconductor may not be available.

The products involved include chips used in the European auto industry and consumer electronics. The statement also said the latest move “is not aimed at other companies, industries or countries” and “the parties concerned can challenge this decision in court.”

Dutch newspaper New Rotterdam Handelsblatt (NRC) quoted people believed to be insiders as saying there were "indications" that Nexperia planned to leak chip technology to China, which would pose a direct threat to the Netherlands' national and economic security.

The chips designed by Ansem are reportedly not more advanced than those from major players like Nvidia, AMD, Qualcomm, or Intel, but their efficiency-driven business processes can improve productivity and reduce chip defects, which is certainly valuable.

In 2022, the British Government also made a similar move to prevent Nexperia from acquiring Newport Wafer Fab (Wale) but failed.