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The Netherlands Takes Control of Nexperia Chip Factory Amid National Security Concerns
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On October 26, 2023, the Dutch government announced it would take control of Nexperia’s chip factory in Nijmegen, a move triggered by national security concerns related to the company’s Chinese ownership. This unprecedented intervention highlights growing anxieties about strategic technology falling into the hands of foreign governments.
Background: Nexperia and it’s Ownership
Nexperia, a semiconductor manufacturer specializing in discrete, logic and power transistors, is owned by Wingtech Technology, a Chinese company. The Nijmegen facility is crucial for producing advanced chips used in a variety of industries, including automotive, defense, and telecommunications. Nexperia employs over 500 people at the Nijmegen location reuters reported.
Wingtech Technology acquired Nexperia in stages, beginning in 2017, initially attracting limited scrutiny. However, concerns grew as geopolitical tensions between the West and China escalated, and the strategic importance of semiconductor manufacturing became increasingly apparent. The factory in Nijmegen is particularly sensitive as of its role in supplying chips for defense applications according to the Financial Times.
The Government Intervention: A Timeline
The Dutch government’s intervention began after nexperia attempted to acquire a larger stake in the Nijmegen facility in September 2023. The Ministry of Economic Affairs and Climate Policy intervened, citing national security concerns and initiating a review of the proposed acquisition as detailed by the Netherlands Food and Consumer Product Safety Authority (NVWA).
On October 26, 2023, Minister for Economic Affairs and Climate Policy Micky Adriaansens announced the government’s decision to take control of the factory. The government invoked the Foreign Investment Screening Act, which allows it to block or impose conditions on foreign investments that threaten national security. The government stated it would place the factory under its direct control while seeking a suitable buyer according to the official Dutch government website.
| Date | Event |
|---|---|
| September 2023 | Nexperia attempts to increase its stake in the Nijmegen facility; Dutch government intervenes. |
| October 26, 2023 | Dutch government announces it will take control of the Nexperia factory. |
| Ongoing | Government seeks a suitable buyer for the factory. |
National Security Concerns and Geopolitical Context
The Dutch government’s decision reflects a broader trend of increased scrutiny of foreign investments in strategic sectors across Europe and the United States. Concerns center around the potential for foreign governments to gain access to sensitive technologies, disrupt supply chains, or exert undue influence over critical infrastructure. The war in Ukraine and rising tensions with China have further heightened these anxieties.
Specifically, the Nexperia factory’s production of chips used in defense systems raised concerns about potential vulnerabilities. the Dutch government feared that Chinese ownership could compromise the security of these systems or allow China to disrupt their supply.This case is considered “remarkable” due to the direct intervention and seizure of a company, rather than simply blocking a proposed acquisition
