Chinese-owned semiconductor company Nexperia announced on Monday that the Dutch government has approved its acquisition of Nowi, a Dutch semiconductor startup. Previously, the Dutch government had been investigating the transaction on the grounds of national security.
Why it matters: In June, the Dutch government introduced the Act on Security Screening of Investments, Mergers and Acquisitions (Vifo Act), which includes the scrutiny of sensitive technologies such as photonics, quantum technology, and semiconductors. However, despite the influence of export sanctions led by the US, the Dutch government’s approval of Nexperia’s acquisition indicates that the Netherlands may still be open to business with China.
Details: The Dutch Minister of Economic Affairs Micky Adriaansens stated in a letter to the Dutch parliament on Nov. 27 that there are no legal objections to the acquisition of Nowi by Nexperia, according to Bloomberg.
- Established in 2016, Nowi, is a semiconductor startup based in Delft, in the western Netherlands. The company specializes in manufacturing power management chips capable of harnessing ambient energy sources such as light or vibrations, offering a promising solution to eliminate the reliance on batteries in basic electronic devices. In November 2022, the company announced that it would be acquired by Nexperia.
- In June of this year, the Dutch government initiated an investigation into the Chinese firm’s takeover of Nowi, based on the Vifo Act that came into effect on June 1. The Dutch government stated at the time that it would order the cancellation of the transaction if the deal was found to affect national security.
- On Monday, Nexperia issued an announcement in response to the Dutch government’s final decision. The retrospective effect of the Vifo Act is applicable only to military or dual-use items, and it is evident from the government’s assessment that Nowi’s products do not fall within this category, the company said. After a “period of uncertainty,” Nexperia and Nowi are “able to further realize their ambitions in the Dutch chip ecosystem,” the announcement added.
- In the current climate, it is crucial to establish a well-defined policy that enhances the investment environment in the Netherlands, said Charles Smit, director of Nexperia Netherlands. A transparent and fact-based communication channel between the government and businesses is essential during these times, he asserted.
- Having access to the production, sales and marketing infrastructure of a leading chip manufacturer allows Nowi to bring products to market faster and therefore have a greater impact, according to Simon van der Jagt, co-founder and former CEO of Nowi.
Context: Based in the Netherlands, Nexperia is a subsidiary of the partially state-owned Chinese company Wingtech Technology. The semiconductor firm has a workforce of over 15,000 spread across Europe, Asia, and the US. Nexperia’s components are used in automotive, industrial, mobile, and consumer industries.