In a year already defined by supply chain turbulence and geopolitical maneuvering, the saga of Nexperia—a Dutch semiconductor manufacturer with deep ties to China—has offered a cautionary tale for the global automotive industry. On December 4, 2025, Dutch economy minister Vincent Karremans found himself in the hot seat during a tense debate in the House of Representatives, admitting he was caught off guard by China’s swift and punishing response to the Dutch government’s intervention in Nexperia’s affairs, according to South China Morning Post.
“An assessment was made of possible counterreactions; this wasn’t the most likely reaction from China,” Karremans told lawmakers, reflecting on the fallout after Beijing blocked Nexperia’s chips from leaving China. The move created an instant bottleneck, choking off chip flows and forcing some of the world’s largest automakers to idle production lines. With roughly 70 percent of Nexperia’s estimated 10 billion legacy chips tested and packaged in China each year, the vulnerability was glaring—a chokepoint that major superpowers were quick to exploit.
Karremans’ handling of the crisis was met with scathing criticism. Members of parliament described his actions as “reckless,” “sloppy,” and “amateurish,” questioning why he failed to anticipate Beijing’s retaliation and why contingency planning was so evidently lacking. But the minister’s admission only underscored a larger, more unsettling reality: when it comes to semiconductors, the world’s supply chains remain as fragile as ever, and the consequences of geopolitical missteps can be swift and severe.
The crisis at Nexperia began earlier in 2025 when the Dutch government seized temporary control of the China-owned company, citing national security concerns. China’s response was immediate: it halted exports of semiconductors to Nexperia, effectively weaponizing its control over a critical node in the chip supply chain. Only in November did the two sides reach a settlement, but the damage had already been done, with ripple effects felt far beyond the Netherlands.
According to WardsAuto, Sapna Amlani, Moody’s Supply Chain Director, believes the Nexperia episode is more than a one-off dispute over corporate governance. “For procurement leaders, this is more than a temporary disruption,” Amlani said in an email. “It signals a structural risk: geopolitical decisions can instantly reshape sourcing economics. Even with China easing restrictions, governance breaches and quality concerns persist. Future risks could come from tighter EU controls or retaliatory measures from Beijing.”
Indeed, operational frictions lingered even after the November settlement. Due to internal disputes between Nexperia’s European and Chinese units, the company could not immediately resume wafer exports, highlighting how corporate conflicts can disrupt supply chains just as much as international politics. Amlani pointed out that trade issues—ranging from U.S. tariffs on vehicles and parts to shifting manufacturing commitments—have compounded the complexity for automakers.
So, what can automakers do to insulate themselves from future shocks? Amlani’s advice is clear: diversify, diversify, diversify. She urged manufacturers to broaden the sourcing of key vehicle components, such as semiconductors, and to treat governance and ownership transparency as primary risk factors. “Supply leaders should plan for multiple scenarios, with and without broad exemptions,” she explained, emphasizing the need for robust contingency planning in an age of uncertainty.
One strategy gaining traction is multi-sourcing, which involves securing supply from multiple suppliers across different geographic regions. “Many companies are now considering multi-sourcing as a key strategy for building resilience,” Amlani noted. By spreading risk across suppliers in Southeast Asia, Europe, and North America, automakers can reduce their exposure to any single chokepoint or political flare-up.
But multi-sourcing isn’t just about signing more contracts. It requires manufacturers to standardize core component specifications—think design documentation, engineering change records, material certifications, and process flow diagrams. Amlani emphasized the importance of the “Production Part Approval Process” compliance, which includes producing “golden samples” to ensure quality assurance and supplier accountability. She also recommended adopting traceability tools and analytics, such as Internet of Things devices, blockchain, and quality drift detection, to catch even the slightest changes in component manufacturing. “This helps validate compliance across suppliers at all times,” she said.
The lessons of the past are hard to ignore. The 2021 chip shortage, which led to significant earnings cuts across the automotive industry, is still fresh in the minds of executives and procurement officers. “The 2021 chip shortage underscores the importance of multi-sourcing,” Amlani said, recalling how a single bottleneck can send shockwaves through global production lines and balance sheets.
Another key recommendation from Amlani is regular stress testing of supply chains. What was once a procurement project has now become a core capability for resilient organizations. She advocates for annual tests of the entire supply chain, with quarterly drills focused on critical components such as semiconductors and electric vehicle batteries. These exercises should explore scenarios like export freezes, shipment halts, tariff escalations, and internal governance disputes—essentially, all the headaches that have plagued Nexperia and its customers in recent months.
Is the investment in stress testing worth it? Amlani is unequivocal: “The cost of the 2021 chip shortage alone far exceeds the expense of maintaining a standing stress-test program. In fact, in many cases, the investment is recouped with just one avoided disruption.” For automakers, the arithmetic is simple—an ounce of prevention is worth a pound of cure.
The Nexperia crisis has also served as a wake-up call for policymakers. The Dutch government’s invocation of a Cold War-era security law to justify its intervention has sparked debate over the appropriate balance between national security and economic openness. Critics argue that such moves risk escalating tensions with China and undermining trust with international partners. Yet, as the events of 2025 have shown, the stakes are too high for complacency—semiconductors are the lifeblood of modern industry, and their supply chains are only as strong as their weakest link.
For now, the settlement between the Dutch government and China has allowed chip shipments to resume, but the underlying risks remain. As automakers and governments alike scramble to fortify their supply chains, the lessons of Nexperia will not soon be forgotten. The next disruption may be just around the corner, and the world will be watching to see who is better prepared when it comes.
