The dispute has triggered concerns of production stoppages, especially in the European auto industry
[FRANKFURT] Wingtech Technology says any deal to restart Nexperia’s exports from China must include reinstating the Dutch chipmaker’s former chief executive officer, setting a high bar in discussions to resolve the standoff.
The Dutch ministry of economic affairs took control of Nexperia in late September, citing “acute signals of serious governance shortcomings.” Then on Oct 7, an Amsterdam court suspended Wingtech’s founder Zhang Xuezheng as Nexperia’s CEO after a petition by the company’s management.
The dispute has triggered concerns of production stoppages, especially in the European auto industry, over shortages of Nexperia components, including critical transistors and logic chips.
Wingtech – the owner of Nexperia – is pressing the Dutch government to reverse course and rejects claims of stealing technology, a Wingtech spokesperson said on Thursday (Oct 30).
“It is difficult to escape the conclusion that they have identified Zhang as a soft target whose removal could be publicized as a win,” a spokesperson said in an emailed statement, adding that “restoring full control and ownership rights” was necessary to defuse the tension and restore stability.
The ministry of economic affairs pushed back.
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“The actions of the CEO posed an acute threat to the continuity of production capacity, knowledge, and intellectual property” at Nexperia, a ministry spokesperson said in a statement. Zhang’s moves also represented “misuse of financial resources for the CEO’s self-enrichment as well as his other companies in China.”
The ministry also said it doesn’t have the authority to dismiss or suspend executives under the law invoked to take control of Nexperia and that Zhang’s suspension was the result of an independent inquiry at the Enterprise Chamber of the Amsterdam Court of Appeal.
Beijing responded to the Dutch move by blocking exports of Nexperia chips. The company’s facility in Guangdong is one of the largest of its kind in the world, and about half of Nexperia’s total volumes comes from the site.
While Nexperia is a bit player in the global semiconductor industry, it delivers massive volumes of cheap components and is a critical part of the supply chain. Automotive executives say the only realistic solution to prevent factory shutdowns is a temporary arrangement to resume exports while a broader settlement is negotiated.
The Dutch government’s move to take control of Nexperia was triggered in part by Zhang’s plans to ship some of the chipmaker’s machines from sites in Germany and the UK and to transfer patents to China from the Netherlands, according to people familiar with the situation.
Wingtech on Thursday also denied there was anything improper in its interactions with its Dutch-based affiliate.
“There is no ‘technology transfer’ or ‘technology theft,’ nor is there any so-called ‘transmission of company secrets,’” a spokesperson said, adding that technology sharing is standard in chip manufacturing.
“Furthermore, Wingtech Technology is the lawful controlling shareholder of Nexperia, and Nexperia is a wholly owned subsidiary – there is no need, nor any basis, to ‘steal’ technology from a subsidiary,” the spokesperson said. BLOOMBERG
