Dutch government may be preparing to end Nexperia chip dispute but only if Chinese unit…

The Dutch government is reportedly preparing to suspend its powers over Chinese-owned chipmaker Nexperia if Beijing allows the company to resume exporting critical semiconductors.

The move will likely resolve a dispute that has threatened automotive production globally.Citing people familiar with the matter, Bloomberg reported that the Netherlands is ready to shelve a ministerial order that gave it authority to block or modify key corporate decisions at Nexperia. If chip shipments restart and are confirmed in the coming days, Dutch authorities are willing to revoke the powers as early as next week, the people were quoted as saying.

Dutch government hopeful China will resume chip supplies

The Dutch government said on Thursday (November 6) evening 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 a statement.

Karremans triggered the conflict in late September by invoking a Cold War-era law to grant the government oversight of Nexperia's decisions. The cabinet member in the Netherlands' caretaker administration cited concerns that Wingtech was limiting the chipmaker's operations and threatening supplies of essential components.Karremans pointed to actions by Wingtech founder Zhang Xuezheng that represented “misuse of financial resources for the CEO's self-enrichment as well as his other companies in China.”Wingtech denied the allegations and demanded the reinstatement of Zhang as Nexperia's CEO. An Amsterdam court suspended Zhang on October 7 following a petition by Nexperia management.

Dutch government powers and Beijing's response

The Dutch intervention gave the government authority to block or change major decisions at Nexperia for up to one year. These decisions include relocating company operations or dismissing executives.Beijing responded by restricting exports of Nexperia products from China, which represented approximately half of the company's pre-crisis production volume. Nexperia's Dutch unit manufactures power-control chips used by major automakers including Volkswagen. The company notified customers on October 29 that it had stopped direct wafer supplies to its Chinese assembly plant due to disputes over payments and control.