In a modern world deeply interconnected by global trade, it’s pretty rare that a country will just up and seize a company belonging to another country, but that’s just what The Netherlands did.
The Dutch government has taken control of Nexperia, a Chinese-owned chipmaker based in the Netherlands, in a bid to safeguard the European supply of semiconductors for cars and other electronic goods and protect Europe’s economic security.
The Hague said it took the decision due to “serious governance shortcomings” and to prevent the chips from becoming unavailable in an emergency.
Nexperia’s owner Wingtech said on Monday that it would take actions to protect its rights and would seek government support.
The development threatens to raise tensions between the European Union and China, which have increased in recent months over trade and Beijing’s relationship with Russia.
In December 2024, the US government placed Wingtech on its so-called “entity list”, identifying the company as a national security concern.
Under the regulations, US companies are barred from exporting American-made goods to businesses on the list unless they have special approval.
In the UK, Nexperia was forced to sell its silicon chip plant in Newport, after MPs and ministers expressed national security concerns. It currently owns a UK facility in Stockport.
Nexperia was spun off from NXP, which was spun off from Philips. They’re integrated device manufacturers, but not anywhere near the high-end devices fabbed by TSMC, Intel or Samsung. Quite the opposite. Nexperia specializes in discretes, the cheap, mass-produced individual electronic components (transistors, diodes, MOSFETs) that are on the very bottom rung of semiconductor manufacturing: High volume, low margin operations for extremely cheap, simple chips that still under-gird just about every electronic product made.
That Stockport (greater Manchester) fab was built in 1987, which is so many semiconductor generations ago I can’t even count. The only Nexperia fab left is in Hamburg, which is shown as being built in 1953, but since they’re running 200mm wafers, it was probably last upgraded in the 1990s, and supposedly turns out “100 billion devices per year.” Semiconductor fabs that turn out discretes are informally called “jelly bean factories,” and earn low but reliable profits.
The Dutch Economic Ministry said it made the “highly exceptional” decision to invoke the Goods Availability Act over “acute signals of serious governance shortcomings” within Nexperia.
“These signals posed a threat to the continuity and safeguarding on Dutch and European soil of crucial technological knowledge and capabilities,” the ministry said in a statement.
“Losing these capabilities could pose a risk to Dutch and European economic security.”
The statement did not detail why it thought the firm’s operations were risky. A spokesperson for the minister of economic affairs told the BBC there was no further information to share.
The measures are aimed to keep European chip supplies flowing and protect Dutch intellectual property, said EU-China researcher Sacha Courtial.
In a crisis, a Chinese-owned company could come under pressure from Beijing to halt supplies or prioritise sales to China, crippling European industries like carmakers and electronics manufacturers, he said.
The Hague’s move puts economic security “over free-market investment principles”, in what could pave the way for other governments to follow, said Mr Courtial from the Jacques Delors Institute.
The China Semiconductor Industry Association said on Tuesday that it is “seriously concerned” about the Dutch government taking control of Nexperia.
The group described the measures as “selective and discriminatory” against overseas branches of Chinese enterprises and undermine open trade.
This is a pretty unusual action, and was evidently undertaken after pressure from the U.S. government.
The Dutch court document said records from a June 12 meeting between U.S. Commerce Department officials and the Dutch Foreign Ministry showed rising pressure to remove Nexperia’s Chinese CEO to help keep the company off the list.
“The fact that the company’s CEO is still the same Chinese owner is problematic,” the filing said, citing minutes from the Dutch-U.S. meeting. “It is almost certain the CEO will have to be replaced to qualify for the exemption from the entity list.”
Nexperia is caught between the U.S. and China, with U.S. President Donald Trump ratcheting up pressure on tech as part of a broader trade war in which he threatened 100% tariffs on China’s exports last week. Beijing has announced curbs on exports of rare earths.
Nexperia faces export restrictions from both governments, it said on Tuesday, and is seeking talks. It said a new interim CEO had been put in place after the former chief executive Zhang Xuezheng was removed from his post on a Dutch court order.
The documents released on Tuesday by the Amsterdam Commercial Court showed that Nexperia had been informed by the Dutch Economic Affairs Ministry on June 5 that the new U.S. rule might be coming and it should take action. “It was clear to all involved that (a U.S. listing) could have a significant negative impact on Nexperia and its business,” it said.
The fact the Dutch government so readily acceded to U.S. requests suggests that the case against Nexperia was pretty substantial, and the specter of possibly open conflict with an increasingly bellicose Russia may have played a factor in their decision making. Nailing down key supply chain components, no matter how lowly, is both far-sighted and suggests there’s more to this situation than meets the eye.
Also, it may be that Euroelites are simply tired of both Russia and China’s lawless shenanigans…