Netherlands suspends intervention at chipmaker Nexperia to ease tensions with China

• Beijing says suspension is 'first step in the right direction toward resolving the issue'

ISTANBUL

The Dutch government has suspended its intervention at chipmaker Nexperia in an effort to calm diplomatic tensions with China, outgoing Economic Affairs Minister Vincent Karremans said on Wednesday.

The decision temporarily lifts a measure imposed in late September that allowed Karremans to block key decisions at the Nijmegen-based company if they endangered chip production in the Netherlands or Europe, Dutch broadcaster NOS reported.

Karremans stepped in after Nexperia’s Chinese director was accused of jeopardizing European supply security.

A day after the intervention, a corporate judge dismissed the director.

China responded by blocking exports from Nexperia’s largest factory, located in China, triggering a political dispute and leaving European automakers uncertain about chip deliveries throughout October.

Karremans said suspending the intervention is intended to help “restore relations with China,” noting that Dutch officials are currently in Beijing to discuss resolving the standoff.

He stressed, however, that the suspension does not mean the measure has been rolled back permanently.

The government can reinstate it at any time should Nexperia take decisions that threaten European chip supply.

A Chinese Commerce Ministry spokesperson, meanwhile, said on Wednesday that Beijing “urged the Dutch side to take concrete actions to swiftly and effectively push the resolution of the Nexperia issue at an early date and restore the security and stability of global semiconductor industrial and supply chains,” during the discussions the two sides held face-to-face in Beijing on Tuesday and Wednesday, according to the state-run Global Times.

China also welcomed the Netherlands’ move to suspend intervention at Nexperia, calling it a “first step in the right direction toward resolving the issue.”

“However, the suspension still falls short of addressing the root cause of the turmoil in the global semiconductor industry and supply chain – the complete withdrawal of the administrative order,” the ministry spokesperson said.

Beijing “hopes the Dutch side will continue to demonstrate a genuine willingness to cooperate and put forward a truly constructive solution.”

Both sides also agreed to abolish administrative intervention, support and encourage businesses to resolve internal disputes through consultations in accordance with the law, which “both protects the lawful rights and interests of investors and creates more favorable conditions for restoring the security and stability of the global semiconductor supply chain,” the spokesperson said.

Nexperia, headquartered in the Dutch city of Nijmegen, relies heavily on production in Asia. The Chinese export freeze created weeks of uncertainty for car manufacturers, who warned that shortages could disrupt production lines.