On September 30, 2025, the Dutch government made a move that sent shockwaves through the global automotive and technology industries: it seized control of Nexperia, a major Chinese-owned chipmaker based in the Netherlands, by invoking the Cold War-era Goods Availability Act. This decision, aimed at protecting national security and securing a vital link in Europe’s semiconductor supply chain, inadvertently exposed the continent’s vulnerability and set off a dramatic chain reaction that threatened to grind vehicle production to a halt across three continents.
According to Pearls and Irritations, Nexperia is not just any chipmaker—it’s a linchpin for the automotive sector, supplying millions of transistors, diodes, and power management components to giants like BMW, Honda, Hyundai, Mercedes-Benz, Nissan, Renault, Stellantis, Volkswagen, and Volvo. These chips are the unsung heroes tucked behind dashboards and beneath hoods, making everything from car windows to airbag systems work seamlessly. Most modern vehicles rely on dozens, sometimes over a hundred, of Nexperia parts. In the world of just-in-time manufacturing, where components must arrive precisely when needed, even a small disruption can cascade into chaos. The Dutch government’s move, then, was akin to tossing a wrench into the gears of a finely tuned engine.
The initial Dutch justification was straightforward: they wanted to exert more control over a critical segment of the semiconductor supply chain. Yet, as the dust settled, it became clear that there was more at play. The same day the Dutch seized Nexperia, the U.S. Commerce Department expanded its so-called Entity List, which effectively blacklists firms deemed a threat to American interests. Nexperia landed on the list because its parent company, China’s Wingtech Technology, was already included. According to the summary of an Amsterdam Court of Appeal ruling reviewed by Pearls and Irritations, U.S. officials had pressured Dutch authorities, warning of dire consequences if they didn’t force the replacement of Nexperia’s Chinese CEO and push for Chinese divestment. The message was blunt: get the Chinese out or face sweeping sanctions that could cripple Nexperia’s business.
China’s response was swift and severe. Wingtech decoupled its Guangdong production facilities from Nexperia’s Dutch headquarters, and Beijing imposed an export block, requiring all future Nexperia chip sales to remain within China. This move sent automotive executives in Europe, America, and Asia scrambling. The threat: a sudden and severe shortage of chips could halt assembly lines at some of the world’s biggest carmakers. As Reuters reported, the chips Nexperia produces may be “very basic,” but they are absolutely essential to the electronic systems in modern vehicles.
The situation quickly escalated into a standoff with global implications. The Hague’s action not only angered China but also put the European Union in a tricky position, caught between American coercion and Chinese retaliation. In early October, China’s commerce ministry imposed export controls that disrupted European automakers and their suppliers. The Amsterdam court, meanwhile, stripped Wingtech of control over Nexperia, further inflaming tensions.
In response to the mounting crisis, diplomatic efforts kicked into high gear. On November 26, 2025, China’s commerce ministry announced an agreement with the European Union to urge Nexperia’s Dutch and Chinese units to resolve their standoff through direct negotiations, sidestepping the Dutch government. This marked the first time Beijing publicly supported a company-led resolution with the EU, signaling its dissatisfaction with both the Dutch government and the Amsterdam court’s intervention. During a video call between China’s Commerce Minister Wang Wentao and EU Trade Commissioner Maros Sefcovic, the two sides agreed that “enterprises are the primary actors in resolving the Nexperia issue,” according to a Chinese readout cited by Reuters. They pledged to “jointly urge Nexperia Netherlands and Nexperia China to engage in constructive communication as soon as possible, find a long-term solution, and restore the smooth and stable operation of the global semiconductor production and supply chain.”
Yet, for all the diplomatic maneuvering, Beijing remained unsatisfied. While The Hague suspended its seizure of Nexperia following talks in Beijing, China demanded a full withdrawal—a step the Dutch government has so far refused to take. Minister Wang, speaking to Sefcovic, described the Dutch suspension as only a “small step,” emphasizing that “the Dutch government’s improper administrative and judicial interventions against the company remain in place.” He warned that “the global semiconductor supply chain has not yet returned to normal and continues to face significant uncertainty.”
For a brief moment, the chip shortage was alleviated after China’s commerce ministry granted exemptions and the Dutch government suspended its seizure. But the underlying uncertainty has not gone away. China’s government has repeatedly cautioned that the suspension is not enough and that instability will persist until a permanent resolution is reached. The supply chain, already stretched thin by years of trade tensions and pandemic disruptions, remains on edge.
The Nexperia saga is just the latest chapter in the so-called Chip War—a broader struggle for technological supremacy that has seen the U.S. wield sanctions and export controls as tools of economic statecraft. The Huawei ban, the pressure campaign on Taiwan’s TSMC to halt high-end chip sales to China, and the 2022 CHIPS and Science Act (a $280 billion push to onshore U.S. semiconductor manufacturing) are all part of this escalating contest. In 2023, the U.S. even forced the Dutch to block sales of advanced lithography machines from ASML, the Netherlands’ crown jewel, to China—costing Dutch firms hundreds of millions of euros but reinforcing Washington’s containment strategy.
Europe, meanwhile, finds itself in an increasingly precarious position. As Pearls and Irritations notes, the continent faces soaring energy costs, fragmented policies, and a creeping deindustrialization crisis. It lacks a unified plan to build a vertically integrated tech industry that could insulate it from the crossfire between Washington and Beijing. The Nexperia debacle laid bare just how exposed Europe’s industries are when geopolitical giants lock horns.
With the Dutch government’s suspension of the seizure and China’s partial exemptions, the immediate threat to global vehicle production has eased—but the story is far from over. The fate of Nexperia remains uncertain, and the broader semiconductor supply chain still teeters on a knife’s edge. As both sides urge the company’s Dutch and Chinese units to hammer out a solution, the world is left watching, hoping that cooler heads—and not chip shortages—will prevail.
The Nexperia affair has made one thing abundantly clear: in today’s interconnected world, the battle for control over tiny silicon chips can have outsized consequences, reverberating from government offices in The Hague and Beijing to factory floors in Detroit, Stuttgart, and Shanghai.
