A delegation from the Ministry of Economic Affairs will travel to China next week to break the stalemate surrounding chipmaker Nexperia. Vincent Karremans, outgoing Minister of Economic Affairs (VVD), announced this on Thursday in a statement. Last month, the minister took far-reaching measures against the company to prevent the Chinese owner Wingtech from removing knowledge and machines from Europe. The Enterprise Chamber subsequently placed owner Wing inactive due to mismanagement, meaning he no longer has control over the European branch.
China immediately responded with an export ban on the Chinese Nexperia factory in Dongguan. This is where most of the crucial post-processing takes place – the ‘packaging’ of chips produced in European factories.
Acute scarcity in the automotive industry
This Chinese export ban caused acute shortages and threatened production stops in the global automotive industry. Car companies are the main buyers of cheap electronics parts, of which Nexperia produces approximately 110 billion per year. Thanks to US intervention, China is now allowing chips to be supplied to Western companies again, but the situation remains unstable. Nexperia China follows its own course and the head office in Nijmegen currently has no control over the flow of money, shipments or the quality of the chips from China. Nexperia’s European branch has stopped direct deliveries of silicon disks with new chips to China, but according to insiders there is still enough stock in Dongguan to continue production in the coming months.
The Netherlands works closely with European and international partners, according to Karremans’ statement. The minister “welcomes” that China is now being more lenient with the export restrictions. A group of top officials travels to China to try to restore the entire supply chain and find a solution that is acceptable to both parties. Not an easy job; At the moment, China’s accusation is that the Netherlands ‘nationalized’ a company at the insistence of the US. Conversely, the observation in Europe is that the chip shortage was caused by the Chinese intervention, not by Karremans’ action.
In an interview with the British newspaper The Guardian Karremans said that he no regrets of the way he worked. “I would approach it this way again,” said the minister. He called the developments a ‘wake-up call for the West’ and an ‘economic thriller’, the outcome of which has not yet been determined.
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