Netherlands Seeks to Move Beyond Nexperia Dispute With China, Minister Says

The Dutch want to move beyond the long-standing dispute over semiconductor maker Nexperia, emphasizing the importance of good economic relations and national security.

"The government's objective is to leave this issue behind," Dutch Economic Affairs Minister Dirk Beljaarts told a parliamentary committee. He added that the government wishes to intensify cooperation with China where possible, while continuing its tight monitoring of investments. The comments underline the country's balancing act between economic interests and geopolitical security.

The conflict broke out after the Dutch government ruled last year that Nexperia, part of the Chinese technology conglomerate Wingtech Technology, must sell its stake in the Dutch chip design firm Nowi, which develops energy-harvesting chips. The government said the acquisition was at odds with national security due to the strategic nature of the chips.

It was one of a string of instances of European governments tightening their control over foreign acquisitions in sensitive technology. Many countries have tightened their foreign investment screening regulations in recent years in a bid to protect industries that could undermine economic resilience or national security-including semiconductor production, AI, telecom and quantum computing, and advanced manufacturing.

The Dutch have nonetheless said that China remains an important partner. "It is not in our economic interest to exclude China from the global economy," said the state secretary, Micky Adriaansens. In addition, the country has a crucial role in the semiconductor supply chain due to some of the world's leading chip and equipment manufacturers. "National security plays an essential role in future investment screening", the State Secretary emphasized.

The semiconductor industry has been becoming increasingly involved in the global geopolitics: restrictions, export bans and concerns about supply chain resilience is high on many governments' agendas as they seek to avoid dependence on specific suppliers and countries while retaining control over crucial technologies. Most Asian, North American, and European governments have introduced measures to strengthen domestic chip production and reduce their reliance on overseas supplies and technology.

However, the restrictions the United States and several EU nations have placed on investment in or export to China for sensitive technologies and expertise remain a point of contention between Beijing and the West, which it views as aimed at preventing its rise as a leading power.

In its current communication, the Dutch government indicated that it wishes to put the case to bed, though it reiterates that strategic interests in critical areas must continue to be monitored while promoting global trade. This policy is being viewed as increasingly important given projected growth in global chip demand as industries such as artificial intelligence, electric vehicles, cloud computing, 5G, and industrial automation will contribute to expanding chip sales worldwide, according to an analysis report on the future development of the semiconductor market from TrendForce.

The Netherlands' willingness to put the Nexperia conflict in the past may signal the country’s commitment to pursue a balance between the need to preserve critical sectors while seeking opportunities for global economic cooperation and to remain as a free-market state, analysts said. “It can serve as a pragmatic framework to balance the economic cooperation and national security concerns”, they told in interviews.