BRUSSELS — The Dutch government on Wednesday halted its decision to seize control of the Netherlands-based, Chinese-owned chipmaker Nexperia.

The Netherlands effectively took control of Nexperia at the end of September, after concerns that Dutch technological know-how was leaking to China, in a move that threatened relations between Beijing and The Hague.

Dutch Economy Minister Vincent Karremans said Wednesday that the controversial order, based on a 1952 law, will now be suspended. He cited diplomatic progress with China, in ensuring the supply of chips to Europe. Even Nexperia chips manufactured in Europe are rerouted to China for packaging.

“We are positive about the measures already taken by the Chinese authorities to ensure the supply of chips to Europe and the rest of the world,” Karremans said in a statement.

In parallel with the Netherlands taking control of Nexperia, both the U.S. and China imposed export controls on the company, disrupting the flow of critical chips to carmakers.

The Chinese restrictions were aimed at Nexperia China, a key player in the company’s supply chain; while the U.S. extended earlier restrictions on Nexperia owner Wingtech to its subsidiary.

The Chinese side made “a commitment to ensure the resumption of trade from Nexperia’s facilities in China” as part of a larger trade deal with the U.S. earlier this month, the Dutch said in a fact sheet as they moved to quell the diplomatic furor after claiming a win on the continued flow of critical chips.

Under the original order, the Dutch government seized broad powers over major decisions that affected the company’s production capacity, intellectual property, and its continuity and future.