Dutch government took control of Nexperia over fears it was being gutted – sources

AMSTERDAM (Reuters) -The Netherlands' decision to take control of chipmaker Nexperia in September was due to fears the company's former CEO was already dismantling the company's European operations and moving production to China, four sources in The Hague familiar with the government's thinking said on Monday. A monthlong standoff between China and the Netherlands over Nexperia has prompted carmakers in Europe, the U.S. and Japan to warn of possible production problems due to chip shortages. Although the chips Nexperia makes are very basic, they are used in large numbers in the electronic systems of cars. The sources in The Hague said Nexperia former CEO Zhang Xuezheng, who is also the founder of Nexperia's Chinese parent company Wingtech, had planned to lay off 40% of staff in Europe and close a research and development facility in Munich. Before Zhang was suspended from the CEO role by a Dutch court on October 1, he had already transferred secrets from the company's plant in Manchester, Britain, to a Wingtech-owned plant in China, including chip designs and machine settings, they said. Physical equipment from the company's Hamburg production plant was slated to be taken next, they added. Zhang could not immediately be reached for comment. The Dutch government seized control of Nexperia on September 30, citing lapses in governance. On October 4, the Chinese Ministry of Commerce blocked exports of the company's products out of China. While most of Nexperia's chips are produced in Europe, around 70% are packaged in China before distribution.  The company's Chinese arm has taken steps toward independence and has resumed selling products to domestic Chinese customers. The sources said the Dutch government believes it can negotiate a resolution with China that will restore the company to a unified Dutch-Chinese structure. (Reporting by Toby Sterling, Editing by Rosalba O'Brien)

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