Chinese Owners Excluded from Dutch Chip Manufacturer Nexperia

The Dutch government has invoked a national security law to sever control of the semiconductor manufacturer Nexperia from its Chinese parent company, citing significant governance issues. This measure comes amid concerns over national security and the availability of critical semiconductor supplies, particularly those used in automotive and consumer electronics industries.

The Ministry of Economic Affairs disclosed late Sunday that it discovered “serious governance shortcomings” at Nexperia. The company, partially controlled by the Chinese state through Wingtech Technologies, was acquired in 2018 for $3.6 billion. The Dutch government’s actions followed a court decision that upheld Nexperia executives’ claims against Wingtech, stemming from a September order invoking the Goods Availability Act, which shields essential goods during emergencies.

According to a filing on the Shanghai Stock Exchange, the court decided to suspend Chinese national Zhang Xuezheng from his role as Nexperia CEO, appointing a third-party as his replacement. Additionally, the ruling places all but one of Wingtech’s shares under the control of an independent entity. The Dutch ministry stressed that the intent behind the court order is to prevent a potential shortage of finished and semi-finished products from Nexperia in case of an emergency.

Wingtech’s shares plummeted by 10% in trading on Monday, reflecting the market’s reaction to these developments. The U.S. Department of Commerce recently expanded export control measures that would automatically affect companies with significant foreign ownership linked to entities already under U.S. licensing requirements. Wingtech was added to a blacklist in December 2024, reinforcing the pressure on the company while prompting fears about its impact on Nexperia.

In response to these developments, the Chinese Ministry of Foreign Affairs criticized the Dutch government’s actions, alleging that they were rooted in an exaggerated notion of national security. A senior Wingtech executive accused the Dutch authorities of leveraging U.S. export control policies as a pretext to seize control of Nexperia. However, Dutch officials asserted that the U.S. was not involved in their decision-making process.

The semiconductor manufacturing industry has become a focal point of contention between the U.S. and China, with nations reevaluating their supply chains amid escalating trade tensions. As a strategic response, China has been intensifying its domestic manufacturing capabilities while attempting to navigate international restrictions on technology transfers. The Dutch government’s proactive measures underscore the heightened awareness of cybersecurity threats, particularly given previous concerns expressed by officials regarding Chinese cyber-espionage targeting the Netherlands’ semiconductor sector.

These incidents highlight the evolving landscape where national security considerations are increasingly influencing corporate governance and oversight of technology firms. Business owners should remain vigilant regarding the intersection of geopolitical tensions and cybersecurity, as such dynamics can directly impact operational sustainability and resource availability in critical sectors.