Netherlands takes control of China-owned chip maker Nexperia

In an extraordinary move, the Dutch government has taken control of China-owned semiconductor maker Nexperia to ensure a sufficient supply of its chips remain available in Europe amid rising global trade tensions.

The Ministry of Economic Affairs invoked its rarely-used Goods Availability Act in late September, pointing to “acute signals of serious governance shortcomings” within the Netherlands-based firm.

The law allows the government to intervene under exceptional circumstances to ensure the supply of critical goods and protect against threats to economic security and crucial technological knowledge.

The intervention is designed to safeguard the continuity of Nexperia’s chip supply in an emergency and prevent the loss of “crucial technological knowledge and capabilities” on European soil.

Nexperia produces high-volume semiconductors used extensively in the European automotive and consumer electronics industries, making it a vital link in the continent’s supply chain.

As a result of the order, Nexperia’s Chinese CEO has been removed from his position, and its Chinese parent company, Wingtech Technology, has been temporarily restricted from control.

The government can now block or reverse any decision at Nexperia deemed harmful to the company’s future as a Dutch and European enterprise. Production at the chipmaker is, however, allowed to continue as normal.

Wingtech, which is listed on the Shanghai stock exchange, saw its shares plunge by 10% following the announcement. The company condemned the move as “excessive intervention driven by geopolitical bias” and vowed to seek legal remedies and support from the Chinese government to protect its rights.

This action follows previous scrutiny of Nexperia’s ownership. Back in 2022, the UK government ordered Nexperia to sell its silicon chip plant in Newport, Wales, over national security concerns.

The intervention also comes as Wingtech is already on the US Commerce Department’s “entity list,” a designation that bars American firms from exporting goods to it without special approval.

The Dutch government’s move signals a growing willingness among Western allies to aggressively secure their critical technology supply chains amidst escalating trade tensions with Beijing.