As China and the Netherlands prepare to hold talks this week over the Nexperia chipmaker dispute, Beijing has the patience to resolve the issue through multiple rounds of negotiations to ensure the case remains isolated, analysts said. Dutch Economy Minister Vincent Karremans said a senior government delegation would visit Beijing “to continue our efforts to find a mutually agreeable solution”. The Dutch government took the unusual step of seizing control of Nexperia from its Chinese owners on September 30, citing national security concerns and invoking a law that had been dormant since 1952. Dutch court filings suggest this was done under U.S. pressure, with Washington announcing its expanded trade blacklist the day before. Beijing responded by imposing export controls on certain components made by Nexperia’s China unit, threatening global carmaker supply chains. After the latest round of U.S.-China trade talks, Beijing agreed to exempt compliant orders for chips produced at Nexperia’s China facilities from export bans. Washington also suspended its new entity list rules for a year.
However, the Dutch chipmaker’s European fabrication facilities have yet to resume wafer supplies to Nexperia’s China unit since last month’s suspension. Cui Hongjian, Director of the European Studies Center at Beijing Foreign Studies University, said the resumption of these supplies would be a crucial and positive step. “If the Dutch side fails to make any positive statements this time or remains stagnant in its position, I believe the likelihood of this issue being prolonged – or the possibility that China may take countermeasures – could increase,” he added. Dutch minister Karremans welcomed Beijing’s decision to relax export rules for the chips, though he added that the Netherlands and other countries would continue to monitor the situation to “ascertain if and when trade from Nexperia’s facilities in China is fully resumed”. “Predictable security of supply of these essential chips and mutual dependence are crucial for our industry and supply chains globally. The Netherlands remains committed to diplomatic engagement with China,” he added.
Ministry of Commerce Spokesman He Yadong said Beijing had held several rounds of talks with the Dutch side, maintaining “a responsible attitude for the stability and security of the global semiconductor industry and supply chains”. “We hope the Dutch side will demonstrate the sincerity to cooperate with China, come up with substantial and constructive solutions to the issue as soon as possible, and take real action to promptly and effectively restore the security and stability of the global semiconductor industry and supply chains.”
The Chinese government has also sought to increase pressure on the Netherlands by raising the issue with other European countries in recent weeks. At a meeting with the Spanish Minister of Economy, Trade and Business Carlos Cuerpo, Commerce Minister Wang Wentao brought up the Nexperia case, saying he hopes “the Dutch side will act responsibly to translate its verbal statements into concrete actions, revoke the relevant measures as soon as possible and correct its wrong practices,” according to an official statement. So far, the dispute has remained a bilateral issue centered on the semiconductor supply chain between China and the Netherlands and has not escalated to the European Union level, Cui said. Jens Eskelund, President of the European Union Chamber of Commerce in China, said the fallout over Nexperia has the potential to seriously impact both European and Chinese businesses. “The Chamber will therefore be monitoring developments closely and hopes to see a negotiated solution announced as soon as possible,” he said.
The crisis surrounding Nexperia erupted into a war of words last week between the company’s Chinese and Dutch arms. Meanwhile, China’s Commerce Ministry responded furiously to an interview given to the Guardian newspaper by Dutch Minister Vincent Karremans, in which he said he would repeat his actions if he had to. “If I had been in the same position, with the knowledge I know now, I would have done the same thing again,” the Minister said, in remarks that Beijing described as “not only reckless but utterly absurd. China expresses extreme disappointment and strong dissatisfaction with such remarks that confuse right and wrong, distort the truth, and act unilaterally,” the Ministry of Commerce statement said. “The profound lesson is this is a breach of contract and an unwise and impulsive act that has stirred up a hornet’s nest and is the root cause of the turmoil and chaos in the global semiconductor supply chain.”
Nexperia’s Europe operations, meanwhile, accused its Chinese arm of “refusing to pay” for wafers shipped from Europe and for financial malpractice. It said it “has not received any official update” that a Dutch government order that sparked the crisis had been lifted and that it “continues to act in full compliance with the Dutch government order”. Nexperia claimed that it has continued to ship wafers to China for packaging and testing throughout the crisis and that the Dongguan operation should have enough wafers to satisfy supply for “several months,” the South China Morning Post reports.
