Dutch government says it's relinquishing control of Chinese-owned chipmaker Nexperia

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HONG KONG (AP) — The Dutch government said it’s relinquishing control of Chinese-owned chipmaker Nexperia following a standoff between China and the Netherlands.

Economics Affairs Minister Vincent Karremans said Wednesday that he was suspending an earlier order to take control of Nexperia under a rarely invoked law.

The dispute between the two countries has threatened the supply of chips critical for the global auto industry, with Nexperia’s parts widely used by major carmakers in North America, Japan and South Korea. Automakers warned in recent weeks that they were running low on the chips, and Honda was forced to shut down a factory in Mexico producing its popular HR-V crossover for North American markets.

The Dutch government in late September took effective control of Nexperia, citing national security concerns and “serious governance shortcomings” at the company, which is headquartered in the city of Nijmegen but owned by China’s Wingtech Technology.

The Netherlands moved to seize control of Nexperia after the U.S. put Wingtech on its “entity list” and subjected it to export controls.

In response, Beijing blocked the export of Nexperia chips from its factory in China from early October, a ban that it lifted in recent days as part of the U.S.-China trade truce following U.S. President Donald Trump’s meeting with Chinese leader Xi Jinping.

Karremans said he was suspending his order as a “show of goodwill.” He said the decision came after “constructive meetings” with Chinese authorities over the past few days.

“We are positive about the measures already taken by the Chinese authorities to ensure the supply of chips to Europe and the rest of the world,” he said in a statement.

“In light of these developments, The Netherlands has considered it the right moment to take a constructive step by suspending the order under the Goods Availability Act."

It wasn’t immediately clear from Karremans’ statement who will regain control of operations.