BEIJING (Reuters) -China has blamed the Netherlands for "turmoil and chaos" in the global semiconductor production and supply chain after the latter seized computer chipmaker Nexperia, the Chinese
China Intensifies Pressure on Nexperia Amid Chip Supply Crisis
Overview of the Nexperia Chip Dispute
By Eduardo Baptista, Toby Sterling and Gilles Guillaume
China's Response and Statements
BEIJING/AMSTERDAM/PARIS (Reuters) -The Chinese government slammed the Netherlands on Tuesday over its seizure of chipmaker Nexperia, blaming it for jamming up a resolution to a dispute that has disrupted auto sector supply chains, hit production and caused some firms to furlough staff.
Impact on European Automakers
Nexperia, Chinese-owned but based in the Netherlands, makes billions of simple but ubiquitous chips for cars and other electronics. Supply of those chips has been snarled since a dispute between Amsterdam and Beijing over technology transfer.
Current Status of Negotiations
After positive signals in talks over the weekend, the Chinese commerce ministry issued a strongly worded statement on Tuesday telling the Netherlands to "stop interfering" in Nexperia's internal affairs.
"The Dutch side persists in its unilateral course without taking concrete actions to resolve the issue, which will inevitably deepen the adverse impact on the global semiconductor supply chain," the ministry said in a statement.
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Beijing's statement contradicts messages from the Hague, Brussels and Nexperia that they have been making progress towards a solution, and will be worrying for carmakers that have been scrambling for supplies of Nexperia's chips.
The Dutch government took control of Nexperia on September 30, saying its Chinese owner Wingtech was planning to move the company's European production to China and that this would pose a threat to European economic security.
China responded by cutting off exports of the company's finished chips, which are mostly packaged in China. It said this weekend it would begin accepting applications for exemptions, following a meeting between U.S. President Donald Trump and Chinese President Xi Jinping.
A spokesperson for the Dutch economic affairs ministry, which invoked a Cold War-era law to intervene at Nexperia, told Reuters that talks between both governments were still underway.
"We remain in contact with the Chinese authorities and our international partners to work toward a constructive solution that is good for Nexperia and our economies," the spokesperson said on Tuesday.
European carmakers and suppliers have rushed to apply to China for Nexperia chip export exemptions, which need to be paid for in Chinese currency, or have sought alternative suppliers.
The CEO of Jeep and Fiat maker Stellantis told Reuters on Tuesday that Europe's supply chain vulnerabilities were putting it at a competitive disadvantage versus its rivals in China.
"Today our system means we have zero autonomy as an industry," Antonio Filosa said at a sector meeting in Paris. "Look at the Nexperia chip crisis. Look at the April rare earth crisis that we went through very painfully."
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The European Commission said it welcomed industry indications that China had engaged with EU companies to restore partial flow of chips, preventing a worst-case scenario and creating time and space to find a lasting solution.
A spokesperson for Nexperia, which has warned customers it cannot guarantee quality of shipments from its Chinese site, said the company was focused on restoring supplies for customers and was seeking to "de-escalate as soon as possible."
Ola Kaellenius, CEO of Mercedes-Benz, told Reuters in Paris there were signs that an understanding was closer to being reached between China, Europe and the United States, which had put Wingtech on an entity list late last year.
The German carmaker has sufficient chips for now, Kaellenius said, adding: "... we will see what the American-Chinese agreement leads to. We are watching that carefully."
A spokesperson for Wingtech was not available for comment. The company has said that "only by restoring full control" of Nexperia to its parent can the situation be resolved.
(Reporting by Eduardo Baptista, Toby Sterling, Liz Lee, Gilles Guillaume, Rachel More and Reuters Beijing newsroom; Writing by Adam Jourdan; Editing by Tom Hogue, Jamie Freed and Gareth Jones)
