China’s Wingtech Appeals Nexperia Ruling at Dutch Supreme Court

Wingtech challenged an enterprise chamber’s decision to take away its control of chipmaker Nexperia.

The logo of Nexperia in Hamburg, Germany, on June 27, 2024. Fabian Bimmer/Reuters

Chipmaker Nexperia’s Chinese parent company, Wingtech, said on Nov. 28 that it has gone to the Netherlands’ Supreme Court to challenge a lower court’s decision to remove its control of Nexperia.

The two-month-long dispute, which disrupted auto industry supply chains, shows no sign of ending despite compromises reached by Dutch and Chinese government officials earlier this month, as Wingtech and Nexperia blamed each other for the stalled negotiations.

Wingtech, partially owned by the Chinese communist regime and blacklisted by the United States, acquired Dutch chipmaker Nexperia in 2019.

The standoff between Nexperia’s Chinese parent company and its Dutch headquarters began when Dutch Minister of Economic Affairs Vincent Karremans invoked the Cold War-era Goods Availability Act to seize control of Nexperia, citing concerns over “serious governance shortcomings” that arose from alleged actions by the company’s CEO at the time, Zhang Xuezheng.

The allegations included “improper transfer of production capacity, financial resources, and intellectual property rights to a foreign entity owned by the CEO and not connected to Nexperia.”

A spokesperson from the Economic Affairs Ministry previously told The Epoch Times that the European branch of Nexperia “would have effectively disappeared in the short term” without the minister’s intervention.

Separately, but at about the same time, the Enterprise Chamber of the Amsterdam Court of Appeal suspended Zhang and appointed Dutch businessman Guido Dierick as a non-executive director. All voting rights on the shares in Nexperia, indirectly held by Wingtech, have been placed under the management of an independent administrator.

In response, Beijing blocked the export of Nexperia’s chips, most of which were produced in Europe but packaged in China, and Nexperia China disregarded orders from its Dutch headquarters.

Wingtech’s appeal, filed on Nov. 26, argued that the Enterprise Chambers’ decisions were improper because of Dutch state involvement and because the judges ruled without hearing Wingtech’s arguments. The high court is not expected to rule this year.

Separately, Wingtech has appealed the Dutch state’s intervention, which was later suspended following talks with Beijing.

Nexperia makes chips widely used in home electronics and other equipment, including phones, computers, cars, and medical devices.

Following talks among officials from the Netherlands, China, and the European Union, the Chinese Communist Party earlier this month granted exemptions to export controls on Nexperia chips, and the Dutch government suspended its intervention in Nexperia, but the rift between the company and its Chinese parent and subsidiary remains.

After Beijing pushed for a company-led solution to the dispute, Nexperia said in an open letter on Nov. 27 that it “did not receive any meaningful response” from its entities in China to its “repeated and multiple attempts, both formal and informal, to re-establish the dialogue” via “calls, emails, and proposed meetings.”

Nexperia China in turn accused the Dutch unit of stifling communication by deleting the email accounts of Nexperia China employees and terminating their access to IT systems.

Wingtech and Nexperia China also accused Nexperia’s Dutch headquarters on Nov. 28 of conspiring to build a non-Chinese supply chain. The parent company said negotiations were untenable as Nexperia avoided the issue of its “legitimate control.”

Reuters contributed to this report.