Netherlands Seizes Control of Chinese-Owned Chipmaker Nexperia Amid Rising Global Tech Tensions

In an unprecedented move that signals the intensifying geopolitical battle over semiconductor technology, the Dutch government has assumed control of Nexperia, a strategically important chipmaker headquartered in the Netherlands but owned by Chinese technology giant Wingtech Technology. The dramatic intervention, announced by the Dutch Minister of Economic Affairs, invokes the rarely-used “Goods Availability Act” to ensure the continued availability of Nexperia’s semiconductor products amid escalating global trade tensions that threaten to reshape the international technology landscape.

The ministry cited “recent and acute signals of serious governance shortcomings” at Nexperia in its official statement, warning that these deficiencies posed a direct threat to Dutch and European technological capabilities. This language suggests deep concerns within the Dutch government about how the Chinese ownership structure was managing one of Europe’s most critical semiconductor manufacturers at a time when chip supply chains have become a matter of national security.

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Nexperia’s Strategic Importance in the Global Chip Industry

Headquartered in Nijmegen, Nexperia has established itself as one of the world’s largest manufacturers of essential computer chips, including diodes, transistors, and other discrete semiconductors that form the backbone of modern electronics. While these components might seem simple compared to the advanced processors that power smartphones and computers, they are absolutely critical to virtually every electronic device manufactured today, from household appliances to industrial machinery.

Beyond these basic building blocks, Nexperia has also developed expertise in more sophisticated technologies, particularly “wide bandgap” semiconductors that are increasingly vital in power electronics applications. These advanced chips are essential for electric vehicles, fast-charging systems, renewable energy infrastructure, and the power management systems required by AI data centers that are proliferating globally. As the world transitions toward electrification and artificial intelligence becomes more pervasive, Nexperia’s technological capabilities have become increasingly strategic.

“Losing these capabilities could pose a risk to Dutch and European economic security,” the government statement emphasized, with particular attention to the automotive sector’s vulnerability. The European automotive industry, already undergoing a massive transformation toward electric vehicles, depends heavily on reliable supplies of these power semiconductors. Any disruption to this supply chain could have cascading effects across one of Europe’s most important manufacturing sectors.

An “Highly Exceptional” Government Intervention

The Dutch government characterized its takeover of Nexperia as “highly exceptional,” acknowledging that such direct state intervention in private enterprise is rare in the Netherlands’ market-oriented economy. The legal mechanism enabling this action was enacted in September 2024 specifically to prevent potential disruptions in the supply of critical goods during emergencies or periods of heightened geopolitical tension.

This legislative framework reflects a broader shift in European thinking about economic security. For decades, European nations embraced globalization and international supply chains with relatively few restrictions. However, the COVID-19 pandemic exposed vulnerabilities in these systems, particularly regarding semiconductors and medical supplies. The subsequent chip shortage that paralyzed automotive production and consumer electronics manufacturing convinced policymakers that certain technologies were too strategic to leave entirely to market forces.

The timing of the Netherlands’ action is particularly significant given the rapidly deteriorating state of US-China relations and the increasing weaponization of trade policy by major powers. The semiconductor industry has emerged as perhaps the primary battlefield in this new era of technological competition, with each side seeking to secure its supply chains while denying critical capabilities to potential adversaries.

The Shadow of US-China Trade War

The Dutch government’s intervention comes against the backdrop of dramatically escalating tensions between the United States and China over technology and trade. US President Donald Trump has recently threatened to impose 100% tariffs on Chinese exports, a move that would represent one of the most severe trade restrictions in modern history. These threatened tariffs are part of a broader American strategy to decouple critical supply chains from China and rebuild domestic manufacturing capabilities in strategic sectors.

While the Dutch Economic Affairs Ministry officially denied any US involvement in the Nexperia decision, describing the timing as “purely coincidental,” this claim has been met with widespread skepticism among international observers. The Netherlands and the United States have developed increasingly close cooperation on semiconductor export controls in recent years, particularly regarding restrictions on advanced chipmaking equipment manufactured by Dutch firm ASML.

ASML produces the world’s most advanced lithography machines, which are essential for manufacturing cutting-edge semiconductors. Under pressure from Washington, the Dutch government has progressively tightened restrictions on ASML’s ability to sell its most sophisticated equipment to Chinese customers, effectively limiting China’s ability to produce the most advanced chips domestically. The Nexperia takeover appears to represent an extension of this technology denial strategy into the operational sphere, moving beyond export controls to direct ownership intervention.

Beijing’s Countermoves Complicate the Equation

The geopolitical chess match has grown more complex with Beijing’s recent implementation of restrictions on exports of rare earth elements and permanent magnets, materials that are critical for numerous high-tech applications including electric vehicle motors, wind turbines, and defense systems. China dominates global production of these materials, controlling approximately 70% of rare earth mining and over 90% of rare earth processing capacity.

These restrictions represent Beijing’s response to Western technology controls and demonstrate China’s own leverage in the global supply chain. The rare earth export limitations could significantly impact Europe’s automotive sector, which is already struggling with the transition to electric vehicles and facing intense competition from Chinese manufacturers who benefit from integrated domestic supply chains.

The rare earth restrictions also highlight the mutual vulnerability that characterizes modern technological interdependence. While Western nations control certain critical technologies like advanced semiconductor manufacturing equipment, China has established dominant positions in materials processing and certain manufacturing capabilities. This creates a complex web of dependencies that cannot be easily untangled without significant economic costs on both sides.

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Wingtech Placed on US Entity List

The situation grew more complicated for Wingtech when the company was added to the United States’ “entity list” in December 2024. This designation, administered by the US Commerce Department’s Bureau of Industry and Security, essentially blacklists companies from receiving American technology and components without special licenses.

The US government justified Wingtech’s placement on the entity list by alleging the company played a role “in aiding China’s government’s efforts to acquire entities with sensitive semiconductor manufacturing capability.” This language suggests American intelligence agencies believe Wingtech’s acquisition strategy is not purely commercial but instead serves broader Chinese government objectives to secure control over strategic technology assets.

The entity list designation creates significant operational challenges for Wingtech and Nexperia. Many semiconductor manufacturing processes rely on American software, equipment, or components. Being cut off from these inputs can severely hamper a company’s ability to operate and innovate, even if it doesn’t directly manufacture the most advanced chips.

Chinese Company Condemns “Geopolitical Bias”

Wingtech responded forcefully to the Dutch government’s takeover, though the company’s initial statement was subsequently deleted from social media. In a WeChat post that was archived by Pekingnology, a newsletter focused on Chinese tech policy, Wingtech criticized the Dutch government’s actions as “excessive intervention driven by geopolitical bias” rather than evidence-based risk assessment.

The Chinese company emphasized its record of compliance with local laws since acquiring Nexperia in 2019 and highlighted its substantial employment footprint, with thousands of workers across facilities in the Netherlands, Germany, and the United Kingdom. Wingtech portrayed itself as a responsible corporate actor being unfairly targeted due to its national origin rather than any actual wrongdoing.

A Nexperia spokesperson, speaking to CNBC, stated that the company remains compliant with all applicable regulations and maintains regular communication with government authorities, but declined to provide further comment on the takeover. This restrained response likely reflects the sensitivity of the situation and the company’s hope that cooperation might lead to an eventual restoration of normal operations.

The deletion of Wingtech’s original statement raises questions about internal debates within the company or possible pressure from Chinese authorities about how aggressively to respond to the Dutch action. Beijing typically encourages a coordinated approach to such international incidents, and individual company statements can sometimes complicate broader diplomatic strategies.

Previous Dutch Scrutiny of Nexperia’s Acquisitions

This latest intervention is not the first time Dutch authorities have examined Nexperia’s activities with a critical eye. In 2023, the government launched an investigation into Nexperia’s acquisition of Nowi, a Dutch startup specializing in energy harvesting chips for Internet of Things applications. That investigation, which examined potential national security implications of the transaction, ultimately approved the deal after determining it did not pose unacceptable risks.

However, the fact that Dutch authorities felt compelled to investigate that relatively small acquisition demonstrates the heightened sensitivity around Chinese ownership of European technology assets. Each transaction is now viewed through a security lens in addition to traditional competition and regulatory considerations.

The Netherlands is not alone in taking a harder line on Chinese technology investments. Across Europe, governments have implemented or strengthened foreign investment screening mechanisms specifically designed to scrutinize acquisitions by Chinese entities in sensitive sectors. The United Kingdom, Germany, France, and Italy have all blocked or imposed conditions on Chinese deals in recent years.

Market Impact and Operational Consequences

Financial markets reacted swiftly to news of the Dutch government’s intervention. Wingtech’s stock price plummeted by 10% on the Shanghai Stock Exchange, hitting the daily trading limit that Chinese markets impose to prevent excessive volatility. This sharp decline reflects investor concerns about both the immediate operational disruptions and the longer-term strategic implications for Wingtech’s international business.

A corporate filing dated October 13 confirmed that Nexperia is now operating under temporary external management imposed by Dutch authorities. The government has implemented restrictions preventing changes to Nexperia’s assets, business operations, or personnel for a period of up to one year. This freeze gives authorities time to assess the situation and determine a longer-term resolution while preventing Wingtech from taking any actions that might undermine European interests.

In a particularly significant development, Wingtech Chairman Zhang Xuezheng has been suspended from his leadership roles at Nexperia. This personal dimension to the intervention suggests Dutch authorities may have specific concerns about individual executives’ connections to Chinese government entities or their decision-making at Nexperia. Despite the management upheaval at the top, the company has emphasized that daily operations will continue normally to avoid disrupting customers and the broader supply chain.

Broader Implications for Global Semiconductor Industry

The Dutch government’s unprecedented seizure of Nexperia represents a watershed moment in the evolution of technology geopolitics. It demonstrates that Western governments are willing to take extraordinary measures, including direct expropriation of foreign-owned assets, when they believe national security interests are at stake in the semiconductor sector.

This action will likely have ripple effects far beyond the Netherlands. Chinese companies with operations or investments in Europe and North America must now factor in the possibility of government intervention, even in cases where they have complied with all regulations and operated transparently. This uncertainty will make international expansion more difficult and potentially more expensive for Chinese technology firms as they build in risk premiums for potential asset seizures.

Conversely, Western companies operating in China face increased risks of retaliatory actions. Beijing has its own legal mechanisms for seizing control of companies or assets deemed critical to national security, and the Chinese government has historically shown willingness to use economic leverage in response to perceived injustices. The spiral of mutual restrictions and interventions threatens to fragment the global technology ecosystem that has driven innovation and economic growth for decades.

The semiconductor industry, which has been among the most globalized of all manufacturing sectors, faces particular challenges in this environment. Modern chip production involves complex supply chains spanning dozens of countries, with different regions specializing in design, manufacturing, packaging, testing, and other specialized functions. Unwinding these interdependencies without major disruptions and cost increases will be extraordinarily difficult.

The Path Forward Remains Uncertain

As global trade frictions intensify and technology increasingly becomes a tool of statecraft, the Dutch government’s action underscores the strategic importance that semiconductors have assumed in calculations of national and economic security. What was once primarily viewed as a commercial industry is now recognized as fundamental infrastructure, as critical to modern society as energy or transportation networks.

The temporary nature of the Dutch intervention leaves many questions unanswered. Will the government eventually sell Nexperia to new owners, and if so, who would be acceptable buyers? Could European or American companies step in to acquire the assets? Might the Dutch government choose to maintain longer-term state ownership of such a strategic asset? Or could diplomatic negotiations between Beijing and European capitals eventually lead to a resolution that allows Wingtech to regain control under new conditions?

What is clear is that the era of unfettered global technology flows has ended. The semiconductor industry, which revolutionized the world through international cooperation and specialization, now finds itself fractured along geopolitical lines. As the United States, China, and Europe each seek to secure their own supply chains and deny critical capabilities to potential adversaries, companies and countries caught in the middle face increasingly difficult choices.

The Nexperia case will serve as a precedent and warning for years to come, demonstrating that even established investments in stable, rule-of-law jurisdictions can be subject to seizure when geopolitical winds shift. In this new era of technological nationalism, the only certainty is continued uncertainty as governments prioritize security over efficiency in the critical semiconductor sector.

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By: Montel Kamau

Serrari Financial Analyst

14th October, 2025