China Retaliates Over Dutch Nexperia Seizure

The Dutch government believed it could prevent China from stealing “crucial technological knowledge” by seizing a private semiconductor company, Nexperia. The Amsterdam court of appeals installed new leadership and provided them with sole power to override any decision made by the board. The Netherlands was keen to prevent China from exporting chips back to the mainland, but it overlooked one major factor—the majority of Nexperia’s manufacturing occurs on Chinese soil.

Nexperia may have facilities in Europe, but they’re primarily focused on testing. The leading 80,000 square-meter assembly site is located in Guangdong province, China. China’s Ministry of Commerce may now prevent Nexperia from exporting semiconductor chips to not just the Netherlands but all of Europe. The facility in Guangdong relied on the Dutch facility to add the finishing touches on its semiconductor chips and can expand its own facilities to bypass the Netherlands entirely.

The Dutch government will claim that it prevented China from acquiring crucial technological information by seizing a private company. In reality, the plan utterly backfired as the chip shortage is coupled with advancing demand due to an outpouring of technological advances.

European jobs are at risk. China can easily begin testing at its mainland facilities. Recently released documents show that the United States pressured the Dutch government to replace Nexperia’s CEO, otherwise, the company would remain on the US “entity list.” The US Commerce Department recently expanded its regulations against any subsidiary majority-owned by China that will now face the same regulations as its parent company. “The fact that the company’s CEO is still the same Chinese owner is problematic,” the minutes of the meeting said, as cited by the document. “It is almost certain that the CEO will have to be replaced to qualify for the exemption from the entity list.”

A Dutch high court approved the seizure. US influence strongly impacted the decision, but the Netherlands has also sought to ostracize China. Europe fears Russian invasion and believes China is responsible for aiding Putin’s “crusade” that will expand into the rest of Europe. The US and EU are fighting China through economic warfare and using the free market as cannon fodder.