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(Sharecast News) - The Dutch government has seized control of Chinese-owned chipmaker Nexperia to safeguard access to semiconductors and "crucial technological knowledge and capabilities".
The Ministry of Economic Affairs said on Monday that it had invoked the so-called Goods Availability Act on 30 September following recent signs of "serious governance shortcomings and actions" within the Nexperia business, which is a subsidiary of China's Wingtech Technology. The government, however, did not disclose what those shortcomings were.
The government said that losing certain technological knowledge and capabilities could pose a risk to Dutch and European economic security, given Nexperia's position as key supplier to the European auto and consumer electronics industries.
"The decision aims to prevent a situation in which the goods produced by Nexperia (finished and semi-finished products) would become unavailable in an emergency," the Ministry of Economic Affairs said in a statement.
Regular production processes at Nexperia will be allowed to continue, but the order means that business decisions can be blocked or reversed by the Ministry if deemed harmful to the company, its future as a Dutch and European enterprise, and/or its value chain position in Europe.
The extremely rare move comes at a time of increased geopolitical tensions between the EU and China, and follows Beijing's move last week to enforce stricter controls on the export of rare earth minerals.
The government acknowledged that invoking the Goods Availability Act was "highly exceptional" but necessary due to the "significant scale and urgency of the governance deficiencies".
Wingtech, which is already on the US government's "entity list" over national security concerns, assured that the subsidiary "complies with all existing laws and regulations, export controls and sanctions regimes".
Wingtech shares finished the session in Shanghai down 10% at CNY41.83.
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