Dutch court orders investigation into semiconductor chipmaker Nexperia

THE HAGUE, Netherlands — A Dutch court on Wednesday ordered a formal investigation into Dutch-based semiconductor chipmaker Nexperia and upheld an earlier order suspending its Chinese CEO, citing doubts about the company's policies and conduct.

The written decision by the Enterprise Chamber of the Amsterdam Court of Appeal is the latest step in a saga swirling around Nexperia that sent shock waves through the world's auto manufacturers, who use the company's chips in their cars.

The dispute made global headlines in October, when the Dutch government said it had effectively seized control of the company since late September based on national security concerns.

Nexperia's Chinese CEO Zhang Xuezheng, who's also founder of Nexperia owner Wingtech, was suspended by the enterprise chamber in October following claims of mismanagement.

At a court hearing last month, lawyers for Zhang and Wingtech painted him as a successful businessman trying to guide Nexperia through troubled geopolitical waters. They urged the court not to order an investigation and said Wingtech had been blindsided by the Dutch government move. Zhang was not in court for the hearing.

However, Nexperia lawyer Jeroen van der Schriek told the three-judge panel that the behavior of Wingtech and Hong Kong-based holding company Yuching since October ''makes it clear that they are willing to subordinate Nexperia's interests to other interests.''

An English statement issued by the court on Wednesday's ruling said that chamber found that ''a conflict of interest has been handled without due care'' at Nexperia.

The court statement said that it could not definitively say how long the investigation would take, but added that such probes can take more than six months. The court will use the findings to assess ''whether there has been mismanagement at Nexperia and whether definitive measures need to be taken.''

Nexperia did not immediately respond to an emailed request for comment.

The dispute at Nexperia escalated when China temporarily blocked the export of Nexperia chips from its plant in China in October, sending global auto manufacturers scrambling to secure supplies and alternatives. Beijing's export ban was later lifted, after U.S. President Donald Trump met with Chinese leader Xi Jinping in late October. And the Dutch government in November said it was relinquishing its control of Nexperia as a ''show of goodwill.''

But a standoff between Nexperia's headquarters in the Netherlands and its Chinese unit continued to fuel chip supply chain concerns. Nexperia's Chinese arm had said its Dutch headquarters interrupted shipments of wafers to its Chinese factory, which it said had impacted its core production operations and weighed on its ability in delivering finished products. Nexperia's headquarters hit back, and said the Chinese unit had ignored instructions from the head office.

''Nexperia's situation now requires, first and foremost, a situation of calm that allows Nexperia to restore its internal relations, its production chain and deliveries to customers,'' the court said Wednesday.