The saga of Netherlands-based and Chinese-owned chipmaker Nexperia, caught up in broader geopolitical tensions between the United States and China, is rekindling a debate about foreign investment in Europe and is likely to lead to further scrutiny by EU countries on future Chinese investments in the bloc, according to analysts.
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After The Hague seized control of Nexperia from its Chinese owners on September 30, citing national security concerns and invoking a law that had been sitting idle since 1952, Beijing responded by imposing export controls on Nexperia chips finished in Chinese facilities.
In recent days, according to the European Commission, China’s commerce ministry engaged with European companies to restart the disrupted flow of semiconductors and averted a “worst-case scenario”.
However, in Europe, the dispute has sparked a rethink of how to handle foreign investment, especially from China, as the risk of collateral damage has become more pronounced amid US pressure to wrest back control while China maintains a firm grip on key supply chains, analysts say.
Sacha Courtial, a China researcher at the Paris-based Institut Jacques Delors think tank, said the current situation was partially a result of loose policies in past decades, when many European countries, the Netherlands included, did not have a screening process to check foreign investments.
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Nexperia, a major supplier of legacy chips for automotive and industrial users, was acquired by China’s Wingtech Technology in 2019 – a deal that set a record for China’s overseas semiconductor acquisitions and transformed Wingtech from a low-end electronics producer into a global semiconductor player, according to Laila Khawaja, an analyst at Gavekal Research.