China handed control of crucial chip factory after stand-off with Dutch

The Dutch government has surrendered control of a crucial microchip manufacturer to China after a standoff triggered a crisis at European carmakers.Vincent Karremans, the Dutch economic minister, said the Netherlands would return control of Nexperia to its Chinese owner Wingtech following negotiations with Beijing.The Netherlands seized control of Nexperia in October, invoking a Cold War-era law to oust Zhang Xuezheng, its chief executive.The Dutch government accused the company’s Chinese owners of “serious governance shortcomings” that threatened the supply of critical microchips to Europe.According to Dutch media reports, officials also feared that Nexperia’s trade secrets had been stolen by China and it was planning to shift production out of Europe.The move triggered a crisis in the European car industry, which is heavily reliant on Nexperia’s microchips.China halted exports of chips to Europe while staff at the company’s Chinese division started refusing instructions from its headquarters on the continent.Some of Europe’s biggest carmakers warned the supply chain shock could force them to shut their factories.However, after an intervention this month by Donald Trump, the US president, China said it was prepared to ease an export ban on Nexperia’s technology.On Tuesday, Mr Karremans said it was now the “right moment to take a constructive step by suspending my order under the Goods Availability Act regarding Nexperia”.He said: “We are positive about the measures already taken by the Chinese authorities to ensure the supply of chips to Europe and the rest of the world. We see this as a show of goodwill. We will continue to engage in constructive dialogue with the Chinese authorities in the period ahead.”The crisis has prompted calls for Labour to intervene at a Manchester chip plant that is also controlled by Nexperia.Nexperia was previously forced to offload a factory it owned in Wales over national security concerns about its Chinese parent company.Nexperia executives previously denied its ownership of the Welsh plant presented a national security risk. It did not comment on the Manchester claims.Sir Iain Duncan Smith, a former Conservative Party leader, told The Telegraph last month: “The same rules should apply. I don’t understand why this hasn’t been resolved by the Government.”A Wingtech spokesman said the Dutch intervention in Nexperia had threatened the “continuity of Nexperia and therefore the economic security of the Netherlands and Europe – which is the exact same argument the Dutch government made previously in support of judicial intervention”.The spokesman added: “Minister Karremans justified his actions by accusing Nexperia’s CEO of various acts of alleged mismanagement.“Wingtech strongly rejects these accusations and points out that, to date, no proof has been provided.”