cross-posted from: https://scribe.disroot.org/post/5427457
A Chinese technology company took trade secrets from Britain as part of plans to move microchip production out of the country, it has been claimed.
Wingtech transferred production techniques from a semiconductor plant in Stockport, Greater Manchester, owned by Dutch subsidiary Nexperia, according to reports in the Dutch media.
The Dutch government last month seized control of Nexperia from Wingtech using Cold War national security laws and relieved its chief executive, Xuezheng Zhang, of his duties.
China has, in return, blocked Nexperia’s Chinese operations from exporting chips, leading to a stand-off that has threatened to hit car production.
Wingtech appropriated techniques for manufacturing power chips known as Mosfets that are made in Nexperia’s Stockport facility, Dutch officials told the NRC newspaper.
Although the chips, which Nexperia sells to the car industry, are not at the cutting edge, the company’s Manchester plant has carefully refined manufacturing techniques to maximise efficiency.
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Reminds me of https://en.wikipedia.org/wiki/Francis_Cabot_Lowell
It’s not clear to me what the similarity is. As I understand it, Lowell took trade secrets from UK companies without purchasing them.
In contrast, WingTech purchased Nexperia in 2018 for $3.6 billion, according to wikipedia. I’m not privy to the details of the purchase but in general I expect that when one purchases a company as a going concern, one purchases all its assets, including any intellectual property, goodwill, facilities, etc. Note that the article says that WingTech ‘appropriated’ techniques, not that they misappropriated them.
The distinction is made clearly in the quote of a WingTech statement in the article:
“Furthermore, Wingtech Technology is the lawful controlling shareholder of Nexperia, and Nexperia is a wholly-owned subsidiary of Wingtech Technology — there is no need, nor any basis, to ‘steal’ technology from a subsidiary.”
You’re correct! I was too quick to draw similarities.
To be fair, much of the media and even the Dutch government is accusing or suggesting WingTech is doing something illegal: that they don’t have the right to do as they wish with the intellectual property of the company they purchased, including giving it to others, if they wish. It’s not surprising that many people end up with the impression that WingTech has done something nefarious.
And it’s not that moving production out of the UK or the Netherlands isn’t an adverse outcome for those countries. But they (at least the previous owners) did receive billions of dollars and they shouldn’t expect to be able to sell the company for financial benefit and maintain control of it, unless that control was part of the purchase and sale agreement.
What seems inappropriate to me is that the Dutch government allowed the sale of the company and then seized control of it because they weren’t happy with what the new owners choose to do with it.
Years ago I sold a house. The new owners cut down the beautiful old apple tree in the front yard, turning it into a barren expanse of grass lawn. I didn’t like it. My old neighbours didn’t like it. It was a loss to the community. But none of us suggested the new owners didn’t have the right to do with their tree as they choose and none of us even attempted to sieze control of their property. It would have been absurd if we had.
because they weren’t happy with what the new owners choose to do with it.
I’m not sure, but as far as I understand the deal came with certain conditions and the new owner did actually break them.
You could have sold the house under the condition your neighbour has to agree to them cutting down the tree for example.
But i as far as i can judge this, the dutch government could have seen this coming and i understand why China doesn’t like what’s happening.
It is possible that Nexperia breached some conditions of the purchase but the statement of the Dutch Government doesn’t indicate any such conditions existed or that they were breached. The only justification seems to be “serious governance shortcomings and actions within Nexperia”, and their concern that Nexperia might not continue to provide goods and services in the country the way the government wants. I don’t see any indication that Nexperia had an obligation to do so under the terms of the purchase by WingTech in 2018.
Thanks for sharing, i’m still trying to form my opinion and the context is bery relevant for that.
