https://x.com/NuryVittachi/status/1978048079887745283
CHINESE FIRMS ARE SCRAMBLING to see if they have to restructure operations to protect themselves after Wingtech’s European chip plant was seized this week by the Dutch government.
Further, it is now known that this is one of several attacks on the acclaimed Chinese tech firm, once known as a contractor for Apple products, and currently a major producer of the world's semiconductors.
Wingtech yesterday filed papers with the Shanghai Stock Exchange which revealed that it was restructuring its international operations, selling its units in Hong Kong, India and Indonesia to an associated firm, Luxshare.
Now other companies looking at ways to protect themselves, fearing a wave of similar property-grabs from western nations like the UK, the Netherlands, the US or others.
“This looks like the beginning of something bad,” one international business owner in Hong Kong told us.
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EARLIER ATTACKS
In 2021, the UK’s largest chipmaking company, known as the Newport Wafer Fab, went bust. It was rescued by Wingtech, which paid £63 million through its European operation Nexperia to bring it back to life.
The Chinese firm went through two UK security checks which confirm that it was an owner with no security risks. The 500-plus staff at the plant celebrated, in a news story that was widely covered in the country.
The Chinese owner won the hearts of the employees, by securing jobs, wages, bonuses and pensions, and agreeing to spend more than £80 million on equipment upgrades in the first year.
But the following year, 2022, the British government unexpectedly ordered Nexperia to sell up all shares and leave, because of its Chinese ownership. The UK rulers used various legal means to force the Chinese out of the country.
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U.S. AS WELL
The U.S. has also been creating problems for the Chinese firm, known for its high quality products.
Earlier this year, Wingtech Technology was forced to sell its stakes in five subsidiaries focused on product assembly.
The US Commerce Department had put the firm on its dreaded “entity list” in December 2023, which made it impossible for customers and clients around the world to continue to use it.
The exit deal, with ownership moving to Luxshare earlier this year, was valued at US$635 million, showing the large size of the operation before the US stomped on it.
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OTHER FIRMS, TOO
Other Chinese firms have suffered in the past three years.
British intelligence group GCHQ gave Huawei hardware a clean bill of health – but the UK government in 2022 followed US instructions to legally order the complete removal of all Huawei equipment from the nation's 5G networks for political reasons.
The result is that the UK now has the worst broadband internet speeds in the whole of the European region.
The UK also blocked the sale of Pulsic Ltd, a chip designer, to a Chinese buyer, revealing a hostility to the Chinese that shocked many people in the international business community.
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ANALYSIS: WEST IS PLAYING HARDBALL
The Dutch government’s seizure of Nexperia sent shock waves across the commercial world this week. State expropriation (a diplomatic word for what is too often simply “confiscation” or even “theft”) has historically been very rare – until the recent freezing of Russian assets by the western powers.
European nations have agreed to steal, er, expropriate, the interest dividends earned by the Russians’ cash. (The Europeans' excuse, which is on the lines of "Well, they deserve it" is not normally considered a legal justification for theft.)
However, the world’s businesspeople fear that this will be rare no longer.
“This is not a reactionary change. On the contrary, it is planned, structured and approved by Western nations, now that precedents have been established and set,” a Hong Kong-based analyst told us today.
"The West has preemptively decided that—starting with particular critical sectors—the time is now to commence a process of expropriation,” he added.
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