The Dutch government will not investigate the takeover of Delft

No investigation into takeover of Delft startup by Chinese-Dutch chip maker

There will be no investigation into the takeover of the Delft start-up Nowi by the Chinese-Dutch chip manufacturer Nexperia. Outgoing Minister Adriaansens of Economic Affairs reports to the House of Representatives that there are “no legal objections” to the takeover. The reason she gives is that Nowi’s technology cannot be regarded as suitable for military use.

The takeover was already in November last year. Since June, new regulations have come into force that allow the Minister of Economic Affairs to stop, adjust, or reverse takeovers on the grounds of national security. This concerns the Investment, Mergers, and Acquisitions Safety Test Act (Vifo).

A number of acquisitions, including that of Nowi by Nexperia, were reviewed retrospectively. Initially, the question was purely whether an investigation was necessary.

Bolts and nuts

Nexperia makes simple chips, say the nuts and bolts of the industry, on an enormous scale. The company is relatively unknown, but the chips are in numerous devices and machines.

It comes from the better known NXP, which in turn comes from Philips. In 2019 it was sold to Chinese electronics giant Wingtech. Nowi makes chips that get their energy from the environment, such as vibrations or light.

The theory was that Nowi’s chips might be interesting for military use, which Nexperia has always denied. So Adriaansens actually agrees with Nexperia. The fact that the company is Chinese-owned is an additional sensitivity.

The conclusions are a windfall for Nexperia. “We are pleased that, after a long period of uncertainty, there is now finally clarity,” says Charles Smit, director of Nexperia Netherlands. “Although we have always stated that Nowi and Nexperia’s technology is innocent in nature, today’s announcement confirms this.”

Under a magnifying glass

The company is not only under a magnifying glass in the Netherlands. Recently it has come under pressure from the British government sold a factory in Wales.

In Germany it was the only consortium that did not receive any money from a special support program. In both cases, the fact that Nexperia is part of a Chinese company was seen as too great a risk.