The Netherlands has suspended its powers over chip maker Nexperia, returning control of the company to its Chinese shareholder, Bloomberg reports. The order, which gave the Netherlands the right to block or review Nexperia's decisions, was lifted as a "goodwill gesture," Economy Minister Vincent Carremans said in a post on social network X.

The measures against Nexperia, which is owned by China's Wingtech Technology but based in Nijmegen in the Netherlands, were taken in late September. In response, Beijing restricted exports from Nexperia's Chinese facility in Guangdong, where chips are assembled from European wafers and which accounted for about half of the company's total output before the crisis, the agency wrote. The Netherlands explained its unprecedented intervention by the fact that Wingtech could interfere with the normal operation of the chip maker and create risks for the supply of key components, Bloomberg wrote earlier.

The decision to return control of the chipmaker to China will defuse a standoff with Beijing that was already beginning to hamper automobile production around the world, Bloomberg notes. While Nexperia's chips are not among the cutting edge and the company has only one site in China, the disagreement has affected automakers from Honda Motor to Volkswagen, Bloomberg notes. For example, Honda lowered its full-year profit forecast, temporarily halting operations at some plants, the agency reported earlier. ZF Friedrichshafen and Robert Bosch - major auto component makers - cut output. Volkswagen and BMW created special groups to find alternative supplies of semiconductors, and prices for such components have risen sharply, Bloomberg writes.

Commenting on the Nexperia situation, Sapna Amlani of Moody's said that "this is a signal of structural risk: geopolitical decisions can change the economics of supply in an instant".

This article was AI-translated and verified by a human editor

Share