Dutch authorities seized control of chipmaker Nexperia, leading to a clash between the head office in Nijmegen and the company’s China unit. The dispute unveiled vulnerabilities in global car supply chains, impacting major European, Japanese, and American automakers.

The Bureau of Industry and Security under the US Department of Commerce imposed export control restrictions on Nexperia due to its ownership by Wingtech Technology, blacklisted last year.

The Netherlands’ Ministry of Economic Affairs took over Nexperia, citing national security concerns. Nexperia was barred from relocating assets without Dutch government approval for a year.

China’s Ministry of Commerce issued an export control notice prohibiting Nexperia’s China unit from exporting specific components. The Dongguan facility, responsible for 70% of global output, faced disruptions.

The Dutch Enterprise Chamber ousted Nexperia’s CEO and placed all voting rights under an independent administrator. Nexperia China employees were instructed to ignore Dutch head office instructions.

Nexperia China accused the Dutch head office of spreading misinformation and disrupting operations. The China subsidiary rejected the removal of a senior executive, declaring it legally ineffective in China.

Minister Wang Wentao called on the Netherlands to resolve the Nexperia issue promptly. The Dutch Minister of Economic Affairs expressed willingness to work with China for a constructive solution.

Employees at Nexperia China reported scaled-down manufacturing and reduced working hours. The company’s head office suspended wafer supply to the Dongguan facility due to payment refusals.

Nexperia chips began flowing to Europe after Beijing granted export exemptions. The European Commission noted a worst-case scenario had been avoided, but Beijing criticized Dutch inaction in resolving the dispute.

China’s Ministry of Commerce approved export-licence applications and considered exemptions for eligible exports. German automakers sought to mitigate the impact of the Nexperia chip shortage.

The BIS suspended the Affiliates Rule extending export restrictions for foreign entities owned by listed parties for a year. The first shipments of Nexperia chips to Europe commenced after Beijing exemptions.

The Dutch government suspended the Goods Availability Act, used to seize Nexperia’s European operations, as a goodwill gesture. Wingtech vowed to use all legal means to regain control of Nexperia.

Read more at Yahoo Finance: A timeline of the Sino-Dutch row over the control of chipmaker Nexperia