The Netherlands takes over Chinese-owned chipmaker

0:01Good morning from the Financial Times. Today is Tuesday, October 14th, and this is your FT News Briefing. U.S. investors breathe a sigh of relief, and the Dutch government is taking over a Chinese-owned chipmaker. Plus, European IPOs are finally picking back up. What I think you can call it is a glimmer of hope in what's otherwise been a very quiet, very downbeat market. I'm Sonia Hudson, and here's the news you need to start your day.

0:39U.S. stocks rebounded yesterday. The S &P 500 rose more than 1.5%. So it partially recovered from the 2.7 % drop on Friday. That sell-off happened after President Donald Trump threatened to impose new 100 % tariffs on China. But on Sunday, Trump appeared to walk back that threat. He said that the U.S., quote, wants to help China not hurt it. European markets experienced smaller drops on Friday, and they also made gains yesterday.

1:21The Dutch government has taken control of the Chinese-owned chipmaker Nexperia. The company is based in the Netherlands, but it's been majority owned by a Chinese technology group called WingTech since 2019. The Dutch economics ministry said it was for national security reasons, and it's the latest move governments have taken to protect their semiconductor industries. The FT's Andy Bounds is here to tell us more. He covers the European Union. Hi, Andy. Hi, Sonia. So, first of all, can you tell us more about Nexperia and WingTech? Yeah, Nexperia is a long-time semiconductor manufacturing company.

2:02It's always been based in the Netherlands. They make not particularly sophisticated chips, but they make huge volumes, more than$10 billion a year. And they go into the automotive industry and consumer electronics. And for its part, Wingtech is a Chinese company which started out sort of making smartphones and has started to invest in the EU. And they bought Nexperia in 2019. It's a listed company in China. And what does government takeover mean in practice here? Well, it's quite a remarkable thing. The Dutch government's using a law that's been on the statute book for 70 years that they've never used before to justify this.

2:39And effectively, they've removed the chief executive, who's also the controlling shareholder of Wintek. They're going to install an independent chief exec, and the ministry of the economy will have a say over what Nexperia does. They're not sort of seizing it. It's still owned by Wintec. Wintec will receive dividends and so on. But all the political and economic decisions guiding the company will now be made by European-based directors and by the government. Well, why is the Dutch government doing this? What have they said? Well, they claim that the company was being badly managed and decisions were being taken that would threaten the supply of chips to the European market.

3:20So the argument the Dutch government is making is this was vital to make this move in order to ensure that European manufacturers had access to Nexperia chips for the foreseeable future. And for its part, Wingtech is saying that this decision is an act of excessive interference driven by geopolitical bias, not by fact-based risk assessment. And the Chinese foreign ministry has also weighed in to say that this is discriminatory against Chinese companies and that the Netherlands should adhere to market principles. And I want to take a step back and just acknowledge this is really not happening in a vacuum.

3:57You know, chips have been a point of contention between Western governments and China for quite some time. There's been a lot of kind of tit for tat retaliations, export controls, things like that. How does this fit in with the larger story between China and Western governments? Yeah, it's an interesting question because all of this national security stuff is cloaked in secrecy. We do know the Chinese obviously put sweeping restrictions on rare earth exports just a few days ago. But this process has started before then. But the interesting thing about Nixperia is the chips are not particularly high-end.

4:34So where we've had a lot of restrictions on high-end technology, such as NVIDIA chips from the US or chip-making machines from ASML, which is a Dutch company, We haven't really seen any action at this level, which is sort of mass produced. But if these are now coming in to be part of this big battle, then that widens the field quite a bit. Yeah. What does this signal about where things are headed in the chip industry more broadly? Well, I think it's fascinating because although the U.S. has been very advanced in restrictions on China, you know, the EU has tended to follow quite a bit behind because they're far more reliant on the Chinese market for their exports.

5:12but I think this will increasingly drive what's already happening which is a sort of separate supply chains and in fact, Nick Spirian is moving towards this itself where they will have Chinese-only made chips for China and they're trying to get a production line without any Chinese input at all to supply European production. So you're almost getting a split in the world where it's very hard to build a global supply chain which involves China and the US and Europe and therefore you almost have to have separate ones for each. Andy Bounds is the FT's EU correspondent. Thanks, Andy. Thanks very much.

5:54President Trump was in the Middle East yesterday to celebrate his Gaza peace plan. His visit comes as Hamas released the last 20 living Israeli hostages, while Israel released almost 2 ,000 Palestinian prisoners. Trump addressed the Israeli parliament for about an hour yesterday. Today, the skies are calm. The guns are silent. The sirens are still. In that speech, he praised Prime Minister Benjamin Netanyahu. Trump also thanked the leaders of Arab countries and several U.S. diplomats for helping forge the ceasefire in Gaza. All across the Middle East, the forces of chaos, terror, and ruin that have plagued the region for decades now stand weakened, isolated, and totally defeated.

6:43A new coalition of proud and responsible nations is emerging. Hamas has still not released the remains of more than two dozen deceased hostages. Trump met with world leaders at a peace summit in Egypt later in the day. He suggested he would stay the course to negotiate the next phase of the ceasefire, which is designed to permanently end the fighting in the enclave.

7:13Europe's initial public offering market could be on the verge of a revival. A number of companies have launched or gotten ready for IPOs recently. That is very much welcome news for the region's capital markets after a slowdown. Here to tell me more about it is the FT's Niku Asghari. Hi, Niku. Hi. So tell me about this recent string of listings and almost listings. Yeah, so there have been a few now over the past few weeks in Europe, which comes as there haven't really been many at all over the past few months. Verishor, which is a security services company, raised 3.2 billion euros, and it was the biggest European listing in three years.

7:57And then there was also a prosthetics company called Ottobock, which raised 700 million euros in Germany. And that was Germany's biggest IPO this year. And there are a couple of other companies that are planning to list as well. In the UK, in London, Prince's Group, which most people will know for their tinned tuna and canned food, is planning to list in London. And there's a company called Mobile.de, which is a German car marketplace. And that's considering a 10 billion euro listing in Frankfurt, which would be huge. Okay, sounds like things are definitely looking up. How big of a turnaround does this represent, though?

8:35I mean, how bad have things gotten for European listings? Things have gone pretty bad and pretty quiet. I mean, so far this year, there have been 76 listings across all exchanges in Europe so far this year, which is the lowest level since 2009. And that just, I guess, points really to how quiet things have been across Europe, as a lot of companies have chosen actually instead of listing in their domestic exchanges to go to the US to list on the Nasdaq or the New York Stock Exchange because they believe that they'll get higher valuations, that there are more investors there. And that's been an issue that European policymakers, European regulators have been trying to tackle to encourage European companies to list at home.

9:16And why are we seeing this, I guess, small surge? Can we even call it a surge? I think a surge at this point is pretty optimistic. What I think you can call it is a glimmer of hope in what's otherwise been a very quiet, very downbeat market. And I think the executives and their advisors say that a lot of the geopolitical economic worries, especially around the US tariffs that really surged earlier this year, those worries had sort of eased and maybe now's a good window for them to IPO. Okay, so we're definitely seeing some optimism right now, but do you think that this could turn into a long-term trend?

9:54I think it's cautious optimism, right? You need a few companies to list and for the listing to go well, the share price to rise. And that gives hope to this magical pipeline that bankers always talk about, this pipeline of listings, for those to actually come true and to come through. So they can point to others and say, hey, look, you know, this is a similar company or a company, a similar sector to us that listed maybe a month ago, maybe a few weeks ago, and it went well. So maybe our time is now and maybe there will be a slight revival in these quiet markets. Niku Asghari covers trading for the FT.

10:28Thanks, Niku. Thank you.

10:36The Nobel Prize for Economics was awarded yesterday. Joel Moker, Philippe Aguillon, and Peter Howitt split the prestigious prize. They all won for their work explaining how innovation can drive sustained economic growth. you can read more on all these stories for free when you click the links in our show notes this has been your daily ft news briefing check back tomorrow for the latest business news