Netherlands returns control of Nexperia to Chinese owner | Hacker News Reader

Netherlands returns control of Nexperia to Chinese owner

bloomberg.com

90 pointsboovic40 comments

I think the headline is incorrect , as far as the timeline goes there were TWO separate actions. The first was the Business Court removing the CEO and the Board, the second was the ministrial action to take over Nexperia NL business as part of the wartime measure.

These were all precipitated by the US BIS50+ ruling that threatend to sanction any Chinese subsidiary of any company on the Entity list , which increaed the list from something like 1500 to 30k companies overnight with Nexperia in the mix.

After the recent US-China talks and the suspension of the rule , the Dutch have in kind made movements to backtrack.

However at this point its only the Ministerial action that has been suspended i.e the SECOND action.

The FIRST action by the Business courts still remains in place , so the CEO/Board is still outed.

> These were all precipitated by the US BIS50+ ruling that threatend to sanction any Chinese subsidiary of any company on the Entity list , which increaed the list from something like 1500 to 30k companies overnight with Nexperia in the mix.

The ousting of the CEO wasn't. He was pulling a lot of resources to China and also buying wafers that weren't actually used to fake business.

This was one of the reasons they got on the entity list in the first place and it's very shady if not illegal. But in China it's very common practice, the government even does it itself, building mega cities that remain empty because the prices are too high to afford. Just to prop up their economy stats.

Nexperia was never going to stay under government control, the government isn't in the business of making chips. But dumping the CEO was a good decision (and can't be overturned by the government because it was a court decision)

>The ousting of the CEO wasn't. He was pulling a lot of resources to China and also buying wafers that weren't actually used to fake business.

>This was one of the reasons they got on the entity list in the first place and it's very shady if not illegal.

It actually was the main cause , if one follows the timeline:

June 12 Dutch-US meet: "Minutes of the meeting state... a key point for US is 'that no externally visible measures have been taken. It is understandable that a divestment takes time but the fact that the company's CEO is still the same Chinese owner is problematic'..."

Sept 30: Dutch Ministry of Economic Affairs issued an order barring the firm and its global subsidiaries from changing assets, staff, or IP for a year.

Oct 1: US entity list was expanded "Foreign subsidiaries 50% or more Chinese-owned are now also subject to US export restrictions. As a result, Nexperia also needs licenses to purchase US components, software, or cloud services"

Days later, Dutch and German executives at Nexperia petitioned a court to suspend Wingtech’s CEO Zhang Xuezheng and place the firm’s shares under temporary court management.

From the Court Docs [1] a) US telling Nexperia to ditch its Chinese leadership if it wants a waiver from the entity list b) Chinese CEO's clearly erratic behaviour

One does not get put on the US Gov Entity list for corporate shenanigans , its a Geo-Political instrument to discipline allies and punish enemies.

As far as the company buying excess capex , this would be shady maybe not illegal.

By analogy if Satya from MS tomorrow decided to buy excess Azure capacity for XboxLive and channeled the biz contract to his own AI startup buying from Azure - would it be shady? yes . Rising to the level of removing him , the board, confisicating all Xbox IP under state control would be absurd.

[1] https://uitspraken.rechtspraak.nl/details?id=ECLI:NL:GHAMS:2...

Well the Chinese are powerful and without the help of the US the Netherlands can't do much. Additionally, the process of moving discrete semiconductor production to China is already underway. Production in Hamburg will stop sometime in late 2029 and the R&D center in Nijmegen, Delft will close done late 2028. The US should have helped the Netherlands but now it is over the Chinese won this battle and fairly easily they did not need to use much of the leverage that they had. The commentary by EU officials shows that they used a top down approach using the EU to pressure the Dutch.

Additionally I forgot to mention the withholding of shipments from China of the finished product that served as a public(visible) leverage.

Perhaps something could have been done via the EU. (No, I know, France/Italy/Spain/Germany are way too obsessed with their exports to PRC.)

Been there/done that - Sweden was unjustly bullied by China and got next to no support from EU. That was a mask off moment for some of us. It seems that for member states like Sweden and the Netherlands, we're supposed to just pay a lot of money in order to get toll-free access to the internal market.

Edit: I would welcome a split into EU North and EU South. Sort of like Aldi North and Aldi South.

EU North: UK (welcome back!), Norway (hello!), Denmark, Sweden, Finland, Netherlands, Estonia.

EU South: The other countries.

What if I told you that China has more influence over the EU than it has over the Kamer der Staten-Generaal( the Dutch parliament), thus they are using the EU to pressure the dutch. The irony is that European Sovereignty is respected when all the countries of Europe are able to make their own sovereignty respected i.e. it is each of the individual states making their own sovereignty respected that actually elevates the sovereignty of Europe, the EU by pressuring, disregarding and relegating the sovereignty of the member states devalues the collective sovereignty of Europe. Additionally adversaries need only focus on having leverage over EU officials and the EU officials will do their bidding for them.

The CPC leadership have plenty of personal assets stashed in the EU/UK. It would be easy enough to take them to the cleaners by prosecuting them for violating Chinese AML laws.

For the Netherlands the whole world is just a board game for local politics.

Seeing international media overthink this as some kind of deep strategy is mildly amusing.

You may also be wrong about that.

The current Dutch government is a bunch of egotistical fascists made up of a coalition of parties that try to get one over on the other by any means necessary.

They fell after a year because of that but are still in power until a next one can be formed. They've been like this for 6 months due to our excruciatingly slow election system that requires months to prepare an election. When that finally happened the results weren't much better.

You definitely don't want Holland or UK in your new union. With the rise of fascism there, Farage in the UK (and Brexit was purely xenofobia driven) and the PVV, FvD, JA21 in Holland owning nearly a third of seats.

The EU is getting worse though yes with their damaging of the gdpr, trying to force chatcontrol etc.

Are you sure this is right, and if so would you mind sharing a source for this?

According to the Nexperia 2024 annual report [1], they had just committed to _invest_ in the Hamburg site for their WBG/SiC/GaN production lines. Closure of the fab in Nijmegen was actually reported by NXP[2] not Nexperia - different companies.

[1] https://www.nexperia.com/dam/jcr:fc307e7e-e159-482c-b21b-0f9... [2] https://bits-chips.com/article/closure-of-nxps-nijmegen-fab-...

They didn't use the EU, they put pressure on companies in other countries, notably Germany, which then did the rest.

Headline should be:

The intervention by the Dutch government at the Nijmegen-based chipmaker Nexperia is being suspended.

Huge mistake going back on this. Europe needs to stop letting itself get pushed around. If the Netherlands isn't willing, then hopefully the EU is.

The EU desperately needs some leadership willing to stop the US and China from continuously pushing it around on every single issue. An independent Chip supply chain is an existential necessity for the EU.

Does it need legislation system to pass this or judges can block this somehow? It’s pay walled so not sure.

I must say I feel very vindicated by this. The seizure of control of the company just for appointing a CEO from China (the horror!) never smelled right to me, but everyone in the previous comment section on this tried to rationalize it with "There must be some legitimate national security reason for the Dutch to do this". Clearly not much of a threat for them to cave so quickly!

The CEO is still out, the court did that (based on a case brought by other officers of the company). It can't be reversed by the Dutch government.

This wasn't because a Chinese CEO was appointed, it was because of his recent actions moving (apparantly critical) production away from the Netherlands. Where did you get this angle from?

> Netherlands returns control of Nexperia to Chinese owner

So they shoot themselves in the foot and now, they are also extracting the bullet, without anesthesia. Funny movie, with more sequels to come.

Everything looks so wonderful in this dream but, the wake up, will be harsh.

The Dutch learning we are not in the XX century anymore.

This is a lesson every western European nation should learn and learn them quickly or else they won't make it.

They didn't exactly have any leverage

The Chinese continue to do state capitalism while the West is afraid to say "turnabout is fair play".

FAFO. Id you don't have the ammo, don't play stupid games.

> The order that gave the Netherlands powers to block or revise decisions at Nexperia was dropped as “a show of goodwill”

Why wouldn't CCP/Beijing just be emboldened by this? Why do the dutch feel the need to show goodwill towards CCP?

(Edit: I see a lot of turbulence with this comment. I wonder why people seem to think it's invalid. The Chinese government runs these strategic companies very closely. China is not a democracy. It is a de facto dictatorship run by the CCP, the Chinese Communist Party. Nothing of this really a controversial opinion.)

$$$

That is almost always the case, but please expand.

Maybe I was being a bit flippant, but I don't buy the "goodwill" argument. It's probably went, and by the article, something like this:

China: Great, two can play this game, how about you now lose access to X,Y,Z that may be manufacturing, fabs, investments, rare earths, Chinese markets, etc.

Netherlands: Hmm, that costs more than this company by an order of magnitude. Take it.

This isn't taking into account back channel dealing, conflicts of interest or really anything besides a surface level reading of situation. They had them by the balls.

Idk. It's hard to hit The Netherlands in particular, since trade is with the EU as a block, not with individual countries.

"show of goodwill" is politician-speak for capitulation. Taking over Nexperia caused a chip shortage for the german auto industry, which was an unintended consequence that they couldnt handle.

a bit tired of auto industry's "just in time" supply managment. they had the same problem when covid closed everything down and now 5 years later they still have not learned that they cant just order "enough for 1-2 months of production" and not more. It's not like the parts change in 2 months.

>Why do the dutch feel the need to show goodwill towards CCP?

They're not showing goodwill, they're desperate. Why did the Netherlands (read the US) think it's in any position to seize a company from China when the entire auto industry is dependent on Chinese chips?

I can't help but laugh at this, as a European even. China unlike our esteemed continent isn't going to have its businesses commandeered around by Washington, we should take a lesson in self-respect from them. It's also not on us to dictate what system of government they run their country on. Thankfully someone isn't putting up with Washington's crap.

Hell yes. Note that the Netherlands is also taking orders from the US about what countries their companies can sell to (ASML). No objections in that case.

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