The Netherlands announces suspension of state control over Nexperia

The Nexperia saga has taken another small step toward resolution.

On Wednesday, the Dutch government announced that it has suspended its control over the Chinese-owned chipmaker Nexperia.

• The move follows China’s November 9 decision to loosen controls on Nexperia exports from China intended for civilian use – and recent talks between Dutch and Chinese officials in Beijing.

Some context: In mid-October, The Hague announced that it had taken supervisory control over Nexperia amid fears that Wingtech (Nexperia’s Chinese parent) could move Nexperia’s European operations and technology to China.

• China’s Ministry of Commerce (MofCom) responded by blocking Nexperia’s Chinese entities and subcontractors from exporting certain finished components and sub-assemblies made in China.

More context: Separately, Nexperia’s European management successfully petitioned a Dutch court to suspend CEO Zhang Xuezheng – who also leads Wingtech – over alleged mismanagement, pending further proceedings.

• Wingtech has vowed to fight to have Zhang reinstated, while Nexperia’s Chinese arm has effectively broken with European management, and the EU side has stopped wafer shipments to China.

The result: Nexperia’s European and Chinese arms – which handle separate production steps – have effectively split, severely disrupting the cross-border wafer-and-packaging flow that many automakers rely on.

Get smart: The case is almost certain to drag on for months as the now de facto independent branches of Nexperia work through a divorce settlement.

The big question: Can an arrangement be worked out to keep the chips moving?

• Although the Dutch government's suspension of its control appears to be a step in the right direction, there is no news yet of resumed shipments of Dutch wafers to China for packaging.