China on Wednesday appreciated the Netherlands’ decision to reduce its control over semiconductor firm Nexperia, calling it “a first step in the right direction.” Beijing believes this move could ease global chip shortages, especially after high-level talks between the two governments.

However, China also stressed that the Dutch government had not met its demand to fully end its intervention. At the same time, both Nexperia and its Chinese parent company Wingtech admitted that disagreements between them remain unresolved.

Carmakers added that supply disruptions continue, and the situation has not returned to normal.

Why the Dutch Took Control

The Dutch government assumed control of Nexperia on September 30. Officials said they acted to stop the company’s former CEO from shifting European operations to China.

Beijing responded sharply. On October 4, China blocked exports of Nexperia’s finished chips. Though it has eased the restrictions since then, the disruption has left the supply chain unstable.

Dutch Government Signals Goodwill

Dutch Economy Minister Vincent Karremans said on Wednesday that stepping back from Nexperia was meant to show goodwill, and that talks between China and the Netherlands will continue.

“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.

EU trade chief Maros Sefcovic agreed that the Dutch decision would help stabilise supply chains across Europe.

Carmakers Still Cautious

Nexperia supplies essential chips used widely in the car industry. Earlier shortages forced manufacturers to slow production and even stop operations.

Companies like BMW, Bosch, and Aumovio welcomed the latest development. But they also cautioned that it is too soon to know what effect it will have. Mercedes-Benz and Volkswagen did not comment.

Nexperia’s operations span two continents. Most wafers are produced in Hamburg, Germany, before being shipped to Dongguan, China for packaging and distribution.

Germany’s auto industry group VDA warned that disruptions caused by the dispute are “far from being resolved,” and production could face more negative effects.

Supply Chain Risk Remains

Tensions escalated after the Dutch takeover. Nexperia’s Chinese division claimed it was no longer under European management. On October 26, the European side halted wafer shipments to China, saying payments had not been made. This deadlock continues to threaten chip supplies.

China is currently using its stockpiled chips to maintain supply, providing short-term relief for customers.

Nexperia said it was encouraged by the improving relations between Beijing and The Hague, but insisted that “full restoration of the supply chain requires active further cooperation of Nexperia’s entities in China.”

The company expects its Chinese arm to have enough wafer stock for several months.

Legal Fight Over Former CEO

A Dutch court in October ordered the removal of Zhang Xuezheng, Nexperia’s ex-CEO and founder of Wingtech, after finding signs of mismanagement.

China’s commerce ministry attacked the ruling, calling it “erroneous,” and said it remains a major barrier to settling the dispute for good.

Wingtech also defended itself. A company spokesperson said Wingtech “strongly rejects these accusations,” adding that the Dutch government should withdraw from the case filed by European managers.

“The ministry should now file a letter with the (court), explicitly withdrawing its support for the proceedings,” the spokesperson said.

According to Amsterdam’s Enterprise Court, the next step in the case will be hearings on whether to launch a formal investigation into mismanagement.