Netherlands ready to drop Nexperia control if China chip exports resume: sources

[AMSTERDAM] The Netherlands is prepared to suspend a so-called ministerial order that gave it control over Chinese-owned chipmaker Nexperia in a move that would de-escalate a fight with Beijing that threatens to disrupt automotive production around the world.

The Dutch government is ready to shelve the order, which gave it the power to block or change key corporate decisions at Nexperia, if China allows exports of its critical chips again, according to people familiar with the matter.

If the shipment of supplies resumes and is verified in the coming days, the Dutch are willing to suspend the ministerial order as soon as next week, said the people, who spoke on the condition of anonymity. Financial issues between Nexperia and its Chinese operations would also need to be resolved.

Shares of Wingtech Technology, the China-based parent of Nexperia, surged in the final minutes of trading to close nearly 10 per cent higher in Shanghai.

Shares in Volkswagen – Europe’s largest carmaker and one of the companies most exposed to the supply disruption – rose as much as 1.3 per cent in early trading in Frankfurt, helping to drive gains in the Stoxx 600 Automobiles & Parts Index of 0.7 per cent

In a further sign of a cooling of tensions, the Dutch government said in a statement late on Thursday (Nov 6) that it expects Nexperia’s Chinese unit to resume chip supplies in the coming days.

“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,” Dutch Economic Affairs Minister Vincent Karremans said in the statement.

A spokesperson from the economic affairs ministry declined to comment further on the situation.

Karremans effectively instigated the dispute when he invoked a Cold War-era law in late September to give the government powers over Nexperia’s decisions.

SEE ALSO

Honda cuts annual operating profit outlook on EV cost hit, slow Asia sales

Nexperia says payment dispute led to supply break with China

Nissan returns to operating profit in Q2

Nexperia says it halted supply after China unit refused to pay

Nissan to cut Rogue production in Japan over Nexperia fallout: source

China accuses Netherlands of not working to fix Nexperia dispute

The ‘Chinese owner’ of Nexperia: How Zhang Xuezheng’s tech empire fell to geopolitics

Nexperia cuts wafer supplies to Chinese plant, ratcheting up chip disruptions

Nexperia-owner Wingtech demands reinstatement of ousted CEO as condition to restart China exports

More

The Cabinet member in the Netherlands’ caretaker administration cited concerns that Wingtech was hobbling the chipmaker and threatening the supply of vital components, pointing to actions by Wingtech founder Zhang Xuezheng that represented a “misuse of financial resources for the CEO’s self-enrichment as well as his other companies in China.”

Wingtech has denied those claims and demanded that Zhang get reinstated as Nexperia’s chief executive officer after he was suspended by an Amsterdam court on Oct 7 following a petition by management.

The intervention gave the Dutch state the right to block or change key decisions, including the relocation of company parts or the dismissal of executives for as long as a year.

Beijing retaliated by imposing restrictions on exports of Nexperia’s products from China, which accounted for about half of the company’s pre-crisis volumes.

The Dutch unit supplies power-control chips used by major automakers, including VW. It notified customers on Oct 29 that it was halting the direct supply of wafers to its assembly plant in China over disputes about payments and control.

Without a resolution to the dispute, European automakers face production stoppages within days as reserves dwindle, the industry’s main lobby group warned.

But there are signs that the supply crunch is easing. Honda Motor has been told Nexperia’s chip shipments in China have resumed, and the carmaker aims to get disrupted production back on track during the week of Nov 21, Executive vice-president Noriya Kaihara said on Friday. BLOOMBERG