China pushes for mediation to resolve Nexperia dispute

By Eduardo Baptista

BEIJING (Reuters) -China's commerce ministry said on Wednesday that it agreed with the European Union to urge Nexperia's Dutch and Chinese units to resolve their standoff, sidestepping the Dutch government.

The decision by The Hague last week to suspend its September 30 seizure of the Chinese-owned, Netherlands-based chipmaker fell short of Beijing's demand for a full withdrawal.

Following the seizure, Nexperia's Chinese unit declared independence from the European headquarters, which responded by halting wafer shipments to Nexperia's Chinese plant.

The commerce ministry's latest statement marks the first time Beijing has vowed to push for a company-led resolution with the EU, signalling its dissatisfaction with the Dutch government and an Amsterdam-based court that last month stripped Chinese firm Wingtech of its control over the chipmaker.

"(China and the EU) agreed that enterprises are the primary actors in resolving the Nexperia issue," according to a Chinese readout of a video call between China's commerce minister Wang Wentao and EU trade commissioner Maros Sefcovic.

"They will jointly urge Nexperia Netherlands and Nexperia China to engage in constructive communication as soon as possible, find a long-term solution, and restore the smooth and stable operation of the global semiconductor production and supply chain."

Wang also said China hopes the EU will urge the Dutch government to propose a "constructive solution" and create conditions for Nexperia's quarrelling entities to engage in internal negotiations.

The Chinese government responded to the Dutch seizure by imposing export controls on Nexperia chips packaged in China in early October, causing production disruptions to European automakers and their suppliers.

Although the chips Nexperia makes are very basic, they are used in large numbers in the electronic systems of cars.

The chip shortage was alleviated after China's commerce ministry granted exemptions and The Hague suspended its seizure last week following talks in Beijing.

But the Chinese government has since warned the suspension was not enough, and that uncertainty would plague the Nexperia chip supply chain until a permanent resolution to the dispute was reached.

Wang reiterated this position on Wednesday, calling the suspension only a "small step", adding that "the Dutch government's improper administrative and judicial interventions against the company remain in place."

"The global semiconductor supply chain has not yet returned to normal and continues to face significant uncertainty," Wang told Sefcovic.

(Reporting by Eduardo Baptista, Editing by Louise Heavens and Philippa Fletcher)