‘I’d do it all again,’ says Dutch minister at heart of car chip standoff with China | Automotive industry

A. The minister at the center of the row warned that the bitter battle in the Netherlands over the future of a Chinese-owned chip maker that threatens to disrupt the global car industry was “a wake-up call for Europe and the West”.

The six-week dispute between the EU and Beijing over Nexperia and vital automotive semiconductors has taught world leaders a serious lesson about their dependence on China, says Vincent Karremans.

The Dutch economy minister said he had no regrets about the fight and would not change his actions despite the hindsight benefits. “There is a lot of interest in what exactly happened,” he says. “It’s like an economic thriller.”

Detailing for the first time how the trade war arose, he recalls high-level talks with his German counterpart, the auto industry and the United States, as well as critical intelligence that he claimed showed Nexperia moving some of its physical operations in Hamburg to China.

The dispute began on September 30, when the Netherlands seized supervisory control of Nexperia, citing risks to “the economic security of Europe”. The decision to implement a Cold War law that had never been used before was taken two days ago at the highest level of the Dutch government and came into force after detailed legal checks.

Karremans said he had nothing to do with the US move on September 29 to put Nexperia on the list of companies facing import controls. “There was absolutely no pressure, no pressure, from the Americans to take action on this,” he says.

“This is what we heard from the Americans: [government] “They closed it down and wanted to make sure Nexperia was on the list.”

The Dutch intervention triggered an angry response from Beijing; Beijing banned the export of most of Nexperia’s finished chips from China for four days. This has thrown automakers’ supply chains into chaos, leading to production pauses in Mexico and warnings from EU manufacturers that production cuts are “days away.”

The crisis appears to be over after an agreement between Donald Trump and Chinese President Xi Jinping in South Korea at the end of last month paved the way for Beijing to restart chip supplies to Europe. Now.

“There is now a solution in the short term… and we are very grateful for the steps taken by the Chinese authorities in this regard.” However, Karremans emphasizes: “If I were in the same position with my current knowledge, I would still do the same thing.”

The Dutch chipmaker, once part of the Philips electronics group, was acquired by China’s Wingtech in 2018. Concerns about the company’s future ability to export to the US emerged in 2023 when the US informed the Dutch that they were considering placing Wingtech on an “affiliated list” of companies that could pose a threat to national security.

“These restrictions were enormous, so it was in our interest to work with the American and Chinese governments and the Nexperia Chinese shareholder to find a solution.”

The Dutch then entered into a dialogue with Zhang Xuezheng, founder of Wingtech and managing director of Nexperia in the Netherlands, to ensure the independence of the company. The demands included the establishment of an independent supervisory board and a requirement that Zhang no longer serve as both CEO and head of human resources.

“I talked to Mr. Zhang about this at the ministry last summer,” says Karremans. “It was one of the first meetings I had as minister responsible for the economy. He was telling me that they were quite keen on this. There was a list of measures to be taken, and then we would meet with the Americans and tell them that this was a Dutch company.”

But things took a dramatic turn in September.

“I had people come into my office saying, ‘Minister, we need to talk to you,’ and they told me what Zhang had done. They said he had removed intellectual property rights, laid people off, and wanted to move production somewhere else.” [Hamburg] To China.”

When asked who these people are, he says: “I can’t tell you who they are… but we have physical evidence that this is so.” [relocation] “It was happening.”

If Wingtech had moved semiconductor wafer production to China, he argues, then “this interdependence that Europe has” would have emerged. [with China] It would turn into a complete addiction. “This… would be very dangerous for Europe.”

After the situation with the Chinese escalated following the Nexperia intervention, Karrenmans met with German Economy Minister Katherina Reiche. “He supported our action. He was very concerned about what this meant for the auto industry.” Leaders in the EU, USA, China, France and other parts of the world were also briefed.

“We didn’t intend to make this matter public. We wanted to resolve it quickly and quietly,” says Karremans.

Beijing’s move to restart chip supplies over the weekend came after the US decided to pause sanctions on companies on its affiliate list. However, the Dutch have not yet backed down from Nexperia and Karremans hinted that nothing will happen until the first chips reach European shores.

“We are in direct contact with the German auto industry and other automakers and Nexperia customers. They will let us know when they receive the chips. Once supply resumes and we are confident that it will continue, then… we will take the appropriate steps that the Dutch government needs to resolve this issue.”

Karremans hopes this “serves as a wake-up call” about the dangers of being dependent on a single country for basic technology or raw materials. Although his VVD party finished third in last month’s general elections, he will remain as economy minister until a new government is formed, which could take a year.

When asked about claims that Wingtech plans to move part of its physical production line in Hamburg to China, the company said it is continuing an investment launch in Germany, creating 150 new jobs, 100 in R&D and 50 in production.

A spokesperson said: “Wingtech’s $200 million investment plan for the Hamburg wafer manufacturing facility announced in 2024 is progressing steadily… We expected to continue expanding our operational team as new production lines begin to ramp up, a development that has since been delayed due to Dutch government intervention.”