Nexperia's Chinese management demands disregard for Dutch directives and reaffirms its control

The Chinese management of chip manufacturer Nexperia has demanded that its employees in China ignore "directives from abroad" and comply only with Chinese law, after the Dutch government intervened in the company to prevent, it argued, the transfer of technology and knowledge to the Asian country.

In a letter sent to staff, Chinese managers emphasize that Nexperia, founded as a subsidiary of the Dutch company Philips and acquired in 2019 by the Chinese group Wingtech, is "a Chinese company with operations rooted in China" and must act in accordance with Chinese laws and regulations, as reported today by the Dutch newspaper Het Financieele Dagblad, which had access to the letter.

The message urges employees to "ignore external interference," in an apparent allusion to the Dutch authorities, who recently chose to take an unprecedented measure by intervening in the company, based in the Dutch city of Nijmegen, to block the outflow of technological knowledge to China.

As part of the intervention, the Amsterdam Court of Appeal suspended CEO Zhang Xuezheng, also responsible for the Wingtech Technology parent company, considering that there were "founded reasons to doubt proper management." Voting rights were transferred to an independent administrator and Guido Dierick, former executive of NXP Netherlands, was appointed as a non-executive director.

In response to that decision by the Netherlands, China imposed an export ban from Nexperia's Chinese plant. "This is a direct reaction to the actions of local authorities," the letter notes, which calls the Dutch intervention "interference from local governments" and demands "an end to these erroneous actions."

The European Commission backed the decision of the Netherlands, noting that the country acted to protect "crucial technological knowledge and capabilities" in Europe, and recalled that the defense of "technological security is a priority of the economic security strategy" of the European Union.

Nexperia produces chips used in mobile phones, automobiles and solar panels, among others, and is an essential supplier for the European industry. Its acquisition by Wingtech in 2019 had already raised concerns about the growing technological dependence on China.

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