Chipmaking in the EU

Introduction

In recent weeks, the Dutch government announced that it had taken temporary control of a Dutch-based semiconductor manufacturer by invoking a domestic legislation called the “Goods Availability Act”, citing concerns that the semiconductor company’s Chinese owner was planning to transfer intellectual property to another company. The Dutch-based chipmaker is considered a leading producer of power and signal semiconductors used in automotive and consumer electronics, and the takeover fuelled a trade war that threatened to halt production across various industries.

While the step was domestically justified as essential to secure technological sovereignty, it also raised questions about how other EU jurisdictions—such as Malta—would respond to similar risks under their own investment-screening frameworks.

The Dutch Goods Availability Act

The Dutch Goods Availability Act, originally enacted in 1952, had been adopted to give the Dutch government emergency powers to secure the availability of essential goods, materials and production capacities in times of crisis, such as wars, natural disasters or serious disruptions to the economy and has been rarely invoked in the past decades.

The Dutch government cited acute governance shortcomings and a risk to the continuity and safeguarding of crucial technological knowledge and capabilities on Dutch and European soil as the main reasons for issuing the order for the taking over of control of the semiconductor company.

The takeover and the removal of the chief executive officer of the semiconductor company was not a measure intended to constitute outright nationalisation of the semiconductor company. The company’s production was allowed to continue, but the state acquired powers to veto or reverse corporate decisions deemed harmful to national interests. In particular, the Dutch ministry stressed the need to prevent strategic relocation of assets, technology, or intellectual property outside Europe.

The Goods Availability Act authorises ministers to issue binding directives or assume temporary control over companies that produce essential goods or technologies. Its powers include: (i) imposing conditions on how goods are produced or distributed; (ii) restricting or prohibiting transfers, relocations, or changes in corporate structure that could threaten supply; and (iii) temporarily assuming supervisory authority over management decisions to ensure continuity of operations.

The Goods Availability Act does not automatically entail expropriation or transfer of ownership, but it allows government officials or court-appointed custodians to exercise oversight of management decisions for a fixed period—normally up to one year.

In the recent Dutch takeover, these powers were used to freeze major corporate decisions at the Dutch-based chipmaker, suspend certain executives, and install an independent director to oversee strategic decisions. The objective, according to the Dutch government, was to guarantee the continued availability of semiconductors vital to Dutch and European industry while stabilising the company’s governance.

This action must be seen within a broader European and global context. The semiconductor industry has become a flashpoint in the geopolitical competition between the United States, China, and the European Union. European policymakers increasingly view semiconductor production not merely as a commercial matter but as a question of strategic autonomy and national security.

By invoking the Goods Availability Act, the Netherlands joined a growing number of countries willing to use economic-security instruments to protect high-tech supply chains. Similar sentiments underlie the EU’s 2019 FDI Screening Regulation (Regulation (EU) 2019/452), which coordinates Member States’ national review mechanisms for foreign investments that may affect security or public order.

The Legal Framework in Malta

While the taking over by the Dutch government of the semiconductor manufacturer was domestically justified as essential to secure technological sovereignty, it also raised questions about how other EU jurisdictions—such as Malta—would respond to similar risks under their own investment-screening frameworks. Principally, there are three pieces of legislation of relevance, these being: (1) the Emergency Powers Act (Chapter 178 of the Laws of Malta; (2) the National Interest (Enabling Powers) Act (Chapter 365 of the Laws of Malta); and (3) the National Foreign Direct Investment Screening Office Act (Chapter 620 of the Laws of Malta) (the “FDI Act”).

While the Emergency Powers Act allows for the taking of possession or control on behalf of the government of any property or undertaking, said law is intended to apply for securing the public safety, public health and defence of Malta, and for maintaining supplies and services essential to the life of the community, rather than applying in the context of economic and commercial matters. Therefore, it is debatable whether this legislation could in fact provide a legal basis for taking control or possession in similar circumstances. This would largely depend on whether semiconductors (and their supply and use) could in fact be considered as essential to life of the community.

In the same vein, the National Interest (Enabling Powers) Act is primarily a framework allowing the Maltese government to implement restrictive measures (sanctions, freezing, trade restrictions), however, it does not expressly provide the government the ability to assume management of a company or control production assets other than in the context of the sanctions and restrictions regime.

The FDI Act focuses on the screening of foreign direct investments carried out in Malta which may affect the security or public order of Malta. As set out in the FDI Act, the role of the FDI Office shall also entail assessing, investigating, authorising, conditioning, prohibiting or unwinding a foreign direct investment on grounds of security or public order in Malta. While one may argue that the power of the FDI Office to unwind a foreign direct investment is a wide-ranging power, the FDI Act does not go as far as providing state ‘takeover’ powers like those exercised under the Dutch Goods Availability Act.

Furthermore, while the Duch Goods Availability Act is reactive in nature (i.e. it allows the Dutch government to temporarily assume control of management decisions within a company already operating in the Netherlands), the FDI Act relies on screening and authorisation before an investment takes place. There are however also provisions in the FDI Act allowing the FDI Office to take action after an investment has been concluded, if a notifiable investment is concluded without it having been notified. While the FDI Office can prohibit, condition or unwind a foreign direct investment, it does not grant the FDI Office the power to confer operational control over company management. This is in contrast to the powers granted to the Dutch government under the Dutch Goods Availability Act, pursuant to which the Dutch government had the ability to directly affect day-to-day corporate decisions of the semiconductor company that it took control of. Having said that, arguably, through the provisions allowing the FDI Office to condition an investment, the Office could in fact impose conditions which an investor would need to abide by which may be akin to controlling the operations, however, it is yet to be seen how this would work in practice.

The EU Chips Act

In the broader European context, reference should be made to the EU Chips Act (Regulation (EU) 2023/1781), adopted in 2023, which seeks to strengthen Europe’s semiconductor ecosystem and reduce strategic dependencies on third-country suppliers. The EU Chips Act establishes a comprehensive framework to promote research, manufacturing, and resilience in semiconductor supply chains across the Union, with the ambitious goal of doubling Europe’s global market share in chip production to 20% by 2030. By providing mechanisms for state aid, coordinated crisis response, and investment in “first-of-a-kind” fabrication facilities, the EU Chips Act embodies the same policy rationale that underpinned the Dutch government’s actions – ensuring that critical semiconductor capabilities remain securely anchored within Europe’s borders.

Conclusion

The Dutch government’s intervention marks a decisive moment in the EU’s approach to technological sovereignty and strategic supply chains. While Malta’s current framework allows investment screening and sanctions enforcement, it appears to lack powers equivalent to the Dutch Goods Availability Act to temporarily assume control over corporate management. The Dutch takeover is expected to prompt amendments to the EU Chips Act and will likely encourage a more harmonised Union-wide approach to regulating the chipmaking industry, in an effort to secure Europe’s strategic industrial interests.

Disclaimer: This Law Report does not constitute legal advice. This article was first published in ‘The Malta Independent’ on 13/11/2025.