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Coco Feng

The Nexperia factory in Dongguan, in the heart of southern China’s Pearl River Delta, has long been a poster child for successful globalisation. Since its launch in 2000, the plant, which covers an area the size of 10 football fields, has operated 24 hours a day, seven days a week, non-stop.
Following its most recent upgrade in 2018, its annual production capacity surged to 90 billion units, making it the largest assembly site in the Chinese-owned Dutch chipmaker’s global network.
Yet, this symbol of seamless global manufacturing suddenly became a key pawn in a bitter geopolitical tussle last month, pitting the Netherlands government against the firm’s Chinese owner, Wingtech Technology.
The Nexperia saga, which has created a global car chip shortage, reveals a new reality: Europe’s once-vaunted neutrality and industrial sovereignty are eroding, while China’s foundational role in manufacturing has become too large to fail and too complex to legally unwind.
For nearly a month, parts of Nexperia’s Dongguan production lines have sat idle. Two factory workers said this week that some machinery had been turned off due to a wafer shortage since late last month, with one estimating that a third of the machines were idled – echoing earlier reports by the Post.
Wafers, which are cut into dies, are the core materials in assembling integrated circuits used in computing, communications and power switch applications.
Nexperia’s Chinese facility had relied on wafers from its fabrication plants in the United Kingdom and Germany, but those shipments were abruptly halted as the Dutch-based company grappled with an internal conflict.
Nexperia’s Chinese management refused to comply with directives from its head office and planned to switch to local wafer suppliers, a transition that could take at least six months. Meanwhile, the Dutch headquarters warned clients that products from the Chinese facility may be substandard.

Experts, however, suggested that Chinese fabs might be ready to supply the wafers needed by Nexperia’s local facility.
“Chinese wafer fabs possess the technical capability to fulfil Nexperia’s orders,” said Arisa Liu, chief director and research fellow at Taiwan Industry Economics Services, a databank of the Taiwan Institute of Economic Research.
However, it would take time to “gain widespread acceptance from Nexperia’s overseas clients”, who would have to “go through stringent automotive certification processes, overcome historical trust barriers and current geopolitical uncertainties”, she added.
Chinese wafer makers – including Wuxi NCE Power, Hangzhou Silan Microelectronics and Yangjie Technology – are seen as potential alternative suppliers. Still, the most likely candidate would be Shanghai Dingtai Jiangxin Technology, also known as WingSkySemi – a sister company of Wingtech.
The US shadow
The close ties between Wingtech and WingSkySemi have been a major concern for Dutch authorities, who seized operational control of Nexperia on September 30. Days later, a Dutch court ousted Nexperia’s CEO Zhang Xuezheng, who is also the founder of Wingtech, for alleged mismanagement.
The Netherlands’ intervention was partly driven by concern that “Nexperia would move chip production from Europe to China”, said Frans Scheper, Nexperia’s CEO until 2020, in an interview with Dutch broadcaster RTL last month.
While The Hague has denied any pressure from Washington, the seizure happened just a day after the United States extended its export curbs to cover subsidiaries 50 per cent or more owned by blacklisted companies. Wingtech was put on the US Entity List in December 2024.
Soon after, Beijing blocked the export of chips from Nexperia’s Chinese factory.
The fallout immediately exposed the global car industry – consisting of some of Nexperia’s major customers – to a severe chip shortage, as the Chinese factory is responsible for 70 per cent of Nexperia’s global output.

Nissan Motor reported its inventories could only last until the first week of November. Honda Motor suspended production at a plant in Mexico. Mercedes-Benz was seeking alternatives, while the Volkswagen Group cautioned risks to achieving its annual profit targets.
The situation recently saw temporary relief: the US has since suspended the 50 per cent rule, while China has agreed to ease export restrictions of Nexperia products for non-military purposes. The first resumed shipments were on their way to Europe, the Post reported this week, citing German automotive suppliers.
However, supply chain risks remain as Beijing and The Hague have yet to finalise a deal on the chipmaker’s fate, with US-China tensions lingering in the background.
Chip war
For years, the focus of US-led containment efforts against China has been on the most sophisticated semiconductor technologies, such as some extreme ultraviolet and deep ultraviolet lithography systems from Dutch manufacturer ASML, as well as advanced graphics processing units from US chip designers Nvidia and Advanced Micro Devices.
“Many mistakenly believed that only disruptions in the supply of chips at advanced-process nodes can trigger an industry crisis,” said Liu, who is also a board member of the Asia-Pacific Industrial Analysis Association. “However, Nexperia’s core products are precisely those seemingly ordinary yet critically important mature-process semiconductors.”
Nexperia’s products, such as diodes and transistors, were easier to make than advanced 7-nanometre chips, but they formed the “indispensable cornerstone of modern automotive electronic systems”, Liu said.
“It is precisely these low-cost, highly reliable components that constitute the fundamental operational framework of automotive electronics.”
Nexperia topped the world in shipments of medium-to-small-signal diodes, transistors, as well as electrostatic discharge protection devices, according to Guotai Haitong Securities, citing research firm ICwise.

Liu noted that carmakers and tier-one suppliers typically reserved only a few weeks’ inventory, showing the vulnerability of the automotive supply chain.
Meanwhile, China’s technology in the mature-node sector has rapidly progressed under the nation’s self-sufficiency efforts. A US government report in 2024 found that at least two-thirds of American products likely contained legacy chips produced by China-based foundries. The discovery led to new trade inquiries.
“In the fields of fundamental components and power devices related to new energy cars, Chinese companies have already attained the capability to replace international suppliers at scale,” Liu said. “Through price wars, they are exerting pressure on the global supply chain.”
She added that Chinese carmakers, such as Geely Auto and BYD, had prioritised validated domestic chips due to supply chain security considerations.
However, with regard to high-performance chips, which demand the highest levels of functional security and advanced-node processes, “international giants firmly maintain their technological and ecosystem barriers”, Liu said.
Waning autonomy
If legacy chip competition represents China’s rising leverage, the government action in the Dutch government’s action represents Europe’s falling political autonomy.
While Dutch Economy Minister Vincent Karremans has softened his stance, expressing willingness to “take the appropriate steps where necessary” to resolve the crisis after Beijing accused The Hague of failing to take construction measures, analysts still expected more scrutiny on Chinese businesses and investments.
“While we may see fewer cases like this in the short term, it highlights a broader trend: European governments are scrutinising Chinese acquisitions more closely, at both national and EU levels,” said Antonio Calcara, head of the Geopolitics and Technology Programme at the Centre for Security, Diplomacy and Strategy at Vrije Universiteit Brussel.
US influence plays a big part in this development.
“Europe’s industrial decisions are filtered through geopolitical risk assessments rather than economic logic or the protection of critical assets,” said Sebastian Contin Trillo-Figueroa, a Hong Kong-based geopolitics analyst focused on EU-Asia relations.

“The Netherlands has become the testing ground for the EU’s alignment with US semiconductor policy, translating American extraterritorial measures into European legal forms,” Contin said. “The Dutch seizure of Nexperia reads like the postmortem of that choreography.”
The EU had become a “US military, technological and economic satellite”, he said, pointing to the ASML export controls, the expulsion of Huawei Technologies and ZTE components from telecommunications networks, and proposed tariffs that would favour the US.
Compounding that sense of lost autonomy, the EU seemed to have been sidelined as the US and China negotiated a deal regarding Nexperia’s future.
Senior EU officials “appeared unaware” of the breakthrough deal between US President Donald Trump and his Chinese counterpart, Xi Jinping, earlier this month that eased export restrictions, the Post has reported, citing a letter by Raja Krishnamoorthi, the senior Democrat on the House Select Committee on the Chinese Communist Party.
Contin suggested that the EU could have managed the Nexperia crisis in less disruptive ways.
First, the bloc could have pledged to enforce export restrictions on advanced chips in exchange for exempting legacy production from sanctions to allow continued Chinese ownership under European oversight.
Second, it could have ensured that no military-sensitive chips leave Dutch facilities, while Beijing guaranteed an uninterrupted European supply, monitored by a joint committee.
However, “these paths demand political confidence that Brussels surrendered to Washington years ago,” he said. “The Netherlands offered a case study in how American threats now dictate European industrial policy.”
Legal fight

Founded in 2006, Zhejiang-based electronic-parts supplier Wingtech bought a majority stake in Nexperia in 2018 and gained full ownership in 2020 for 34 billion yuan (US$4.8 billion) – the largest overseas deal by a Chinese company in the semiconductor industry to date.
Wingtech founder Zhang, an engineer-turned businessman, said the Nexperia purchase was his first foray into mergers and acquisitions (M&A), according to an interview with the state-run Shanghai Securities News in 2018.
This year, Wingtech divested nearly all of its consumer electronics business to focus on chips. With its semiconductor segment accounting for 97 per cent of the firm’s income last quarter, Wingtech said it had hired a “renowned international law firm to take legal action” against the Dutch seizure of Nexperia.
Wingtech’s legal options included countersuing the Dutch government and Nexperia, and requesting interim relief to protect the company, according to Lu Tianyi, a counsel at TsingLaw specialising in compliance, M&A litigation, as well as technology and the internet.
A key challenge could be arguing that the government should have used the newer Vifo Act, which went into effect in 2023 and specifically addressed national security risks in foreign investments, instead of the rarely cited 1952 Goods Availability Act to justify the seizure, she said.
Wingtech could also challenge the Dutch claims of mismanagement against ousted CEO Zhang, arguing that accusations of incompetence – specifically ignorance of US-side supply chain risks – were unjustifiable now that the 50 per cent ownership restriction has been suspended, Lu said.
Still, Nexperia lacked a properly planned supervisory board, which could have been an “offensive weapon” in a power fight like this had the company taken pre-emptive steps, she argued.
In 2024, Nexperia consulted the Chinese law firm Fangda Partners to advise on potential governance reforms, including the creation of a supervisory board, according to a report last month from The Bureau, an online publication by investigative journalist Sam Cooper.
However, Nexperia subsequently ignored the lawyers’ advice, a decision that could be read as “a sign of ignorance by Chinese entrepreneurs of the real value of corporate governance in an M&A deal”, Lu said.


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Nexperia is caught in a geopolitical tussle between the Netherlands and China. Illustration: Lau Ka-kuen

Nexperia’s factory in Dongguan, China’s southern Guangdong province. Photo: Coco Feng

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Nexperia’s headquarters in Nijmegen, the Netherlands. Photo: AFP

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Wingtech founder Zhang Xuezheng, seen in an undated photo. Photo: Handout

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Chipmaker Nexperia’s headquarters rises above the urban landscape of Nijmegen, the largest city in the Dutch province of Gelderland. Photo: Shutterstock

Bikes are parked next to Nexperia China’s factory in Dongguan, southern Guangdong province. Photo: Reuters

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A Nexperia employee works with a wafer in a production line at the Dutch chipmaker’s fabrication facility in Hamburg, Germany. Photo: Reuters

Nexperia’s sole China production facility in Dongguan, southern Guangdong province. Photo: Coco Feng

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The dispute around the Dutch chipmaker shows the erosion of Europe’s geopolitical neutrality in the face of escalating US-China rivalry


The dispute around the Dutch chipmaker shows the erosion of Europe’s geopolitical neutrality in the face of escalating US-China rivalry.


US-China tech war: Nexperia saga exposes Europe’s loosening grip on chip supply chain

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The dispute around the Dutch chipmaker shows the erosion of Europe’s geopolitical neutrality in the face of escalating US-China rivalry

The dispute around the Dutch chipmaker shows the erosion of Europe’s geopolitical neutrality in the face of escalating US-China rivalry