(Nov 7): China is allowing Dutch chipmaker Nexperia to export again from its operations in the country, setting the stage for the Netherlands to back down and suspend its powers over the Chinese-owned company.
Signalling a breakthrough in a conflict that threatened to disrupt automotive production around the world, the Dutch government is ready to shelve the measure that gave it the authority to change key corporate decisions, according to people familiar with the matter.
That order, which was issued in late September by Economic Affairs Minister Vincent Karremans, sparked the dispute and now could be rescinded as soon as next week if chip flows are confirmed.
The critical power-control chips have indeed started to get shipped again from Nexperia’s Chinese facility, according to officials from several auto companies.
After receiving an export licence from China this week, Aumovio SE — a parts manufacturer that supplies Volkswagen AG, Stellantis NV and BMW AG — has shipped Nexperia semiconductors and components containing them, chief executive officer Philipp Von Hirschheydt said in an interview.
He added that he was informed that China’s ministry of commerce lifted the broader Nexperia export ban on Friday.
See also: China lifts Nexperia chip ban, says German auto supplier
“It will take some time before all procedures and processes will get back to normal,” the CEO said. There’s still a chance for disruptions in the next four to six weeks, but “if everything I know today is correct, we are not going to be affected,” he said.
Shares of Wingtech Technology Co, the China-based parent of Nexperia, surged in the final minutes of trading to close nearly 10% higher in Shanghai. European automakers and their suppliers also gained on the news. Volkswagen shares climbed as much as 2.7% in Frankfurt, with BMW increasing as much as 2.5%. Shares of Mercedes-Benz Group AG also rose.
See also: AI chip boom fuels Taiwan’s fastest export gain in 15 years
Honda Motor Co aims to get disrupted production back on track during the week of Nov 21 after it was informed that Nexperia’s chip shipments in China have resumed, executive vice president Noriya Kaihara said on Friday.
Robert Bosch GmbH is also getting Nexperia chips out of China, according to people familiar with the situation. A spokesman for the German company — one of the world’s largest parts suppliers — declined to comment. As of Friday morning, there were still temporary production disruptions at several Bosch plants that produce automotive electronics.
The situation, however, remains murky. German parts supplier ZF Friedrichshafen AG is preparing for production disruptions including temporary furloughs as a precautionary measure, a company spokesperson said.
“It is unclear to what extent and at what speed deliveries from China could resume,” the spokesperson said. “The situation remains very tense across the industry.”
Rather than formally lifting restrictions, China has given automotive companies signals that Nexperia parts can be exported without issue to ease short-term constraints, a person close to the situation said. That has sparked a rush to secure parts, even as longer terms issues such as financial disputes between Nexperia headquarters and its Chinese operations remain to be resolved, said the person on condition of anonymity.
In a sign of cooling tensions, the Dutch government said in a statement late on Thursday that it expects Nexperia’s Chinese unit to resume chip supplies in the coming days, a noticeable softening of its previous stance.
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“Given the constructive nature of our talks with the Chinese authorities, the Netherlands trusts that the supply of chips from China to Europe and the rest of the world will reach Nexperia’s customers over the coming days,” said Karremans, the Dutch caretaker minister who invoked a Cold War-era law in late September to give the government powers over Nexperia’s decisions. The economic affairs ministry declined to comment further on the situation.
“We very much welcome the de-escalation and the continuingation of negotiations between the Netherlands and China on this issue,” Luisa-Maria Spoo, a spokeswoman for the German economy minstry, said at a government briefing in Berlin. “We are in contact with the Netherlands and the companies affected.”
Discussions over the issue are set to continue at the “senior official level” on Friday, with EU Trade Commissioner Maros Sefcovic in touch with his counterparts, according to European Commission spokesperson Olof Gill.
“We remain in this constructive trilateral dialog with China and the Netherlands to try to continue to unblock the situation,” he said at a briefing in Brussels.
Justifying the unprecedented intervention the Netherlands cited concerns that Wingtech was hobbling the chipmaker and threatening the supply of vital components, pointing to actions by Wingtech founder Zhang Xuezheng that represented a “misuse of financial resources for the CEO’s self-enrichment as well as his other companies in China.”
Wingtech has denied those claims and demanded that Zhang get reinstated as Nexperia’s chief executive officer after he was suspended by an Amsterdam court on Oct 7 following a petition by management. His future role remains uncertain.
The intervention gave the Dutch state the right to block or change key decisions, including the relocation of company parts or the dismissal of executives for as long as a year. Beijing retaliated by imposing restrictions on exports of Nexperia’s products from China, which accounted for about half of the company’s pre-crisis volumes.
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