On November 28, 2025, Dutch chipmaker Nexperia made an unusual and urgent public appeal to its Chinese subsidiaries, pleading for cooperation to restore its faltering global supply chain. The open letter, published by Nexperia’s leadership in the Netherlands, is the latest twist in a months-long dispute that has sent shockwaves through the automotive and electronics industries, threatening to halt production lines and disrupt markets across continents.
At the center of the crisis is a standoff that began in September, when the Dutch government, citing security concerns raised by the United States, invoked a Cold War-era law to seize control of Nexperia. The move, which was highly unusual in the modern era, set off a cascade of retaliatory actions. Beijing responded by blocking Nexperia’s products from leaving China—a move that immediately raised alarm bells among global automakers and electronics manufacturers already struggling with chip shortages.
Despite repeated attempts by Nexperia’s Dutch management to re-establish dialogue with their Chinese counterparts—including calls, emails, proposed meetings, and formal correspondence—no meaningful response was received. According to Nexperia’s public statement, “We welcomed the Chinese authorities’ commitment to facilitate the resumption of exports from Nexperia’s Chinese facility and that of our subcontractors, enabling the continued flow of our products to global markets. Nevertheless, customers across industries are still reporting imminent production stoppages. This situation cannot persist.”
It’s a critical situation. Nexperia, owned by China’s Wingtech Technology Co., produces billions of so-called foundation chips—transistors, diodes, and power management components—that are manufactured in Europe, assembled and tested in China, and then shipped worldwide. These chips may not be the flashiest components, but they are indispensable for everything from connecting car batteries to powering sensors, lighting, braking systems, airbag controllers, entertainment units, and even electric windows. In short, if it runs on electricity, there’s a good chance it relies on a Nexperia chip somewhere inside.
The supply chain disruption has already started to bite. Honda, for example, was forced to halt operations at its Celaya, Mexico plant and make adjustments to production in both Canada and the United States. The company forecast a reduction of 110,000 units and a total cost of around ¥150 billion ($969 million) for the first half of 2025 as a direct result of the crisis. Nissan, another major automaker, told Reuters that it would cut production by 1,400 vehicles at its Kyushu, Japan plant, following a reduction of 900 units just the previous week.
The fallout isn’t limited to carmakers. Bosch, a leading tier one supplier, has also been affected. The company reported it was “doing everything we can to serve our customers and avoid or minimise production restrictions,” but had already reduced working hours at its Ansbach and Salzgitter facilities in Germany as of early November. Temporary adjustments to working hours continued, and Bosch’s factory in Braga, Portugal, only managed to resume operations on November 24 after being placed on lay-off in late October due to component shortages.
As Nexperia’s plea echoed across the industry, the company called on the leadership of its Chinese entities to “take immediate steps toward structured negotiations to… restore predictable, established supply flows without delay.” The urgency was underscored by warnings from the German Association of the Automotive Industry (VDA), which represents giants like Volkswagen, Mercedes-Benz, and BMW. A VDA spokesperson told CNBC, “In recent weeks, the German automotive industry has largely been able to keep production stable through intensive efforts. However, the disruptions in the supply chain for Nexperia parts caused by political intervention have not been fundamentally resolved. Component availability remains uncertain.” The VDA warned of elevated risks to supply, particularly for the first quarter of 2026.
Behind the scenes, high-level diplomacy has been in overdrive. Following video conferences between Chinese Commerce Minister Wang Wentao, German Economy Minister Katherina Reiche, and European Commissioner for Trade Maros Sefcovic, both China and the European Union have called for a resolution at the corporate level. Chinese commerce authorities stated that both sides agree Nexperia Netherlands and Nexperia China should “promptly engage in constructive communication regarding their internal corporate disputes and find an effective, long-term solution.” Wang Wentao, for his part, insisted the Dutch government needed to revoke its executive order and withdraw the court ruling—actions Beijing sees as the root cause of the impasse.
The underlying tension centers on corporate control. Wingtech, Nexperia’s Chinese parent company, fired back at the Dutch unit’s open letter, calling it “a large number of misleading and untrue allegations.” Wingtech argued that “the unlawful deprivation of Wingtech’s control and shareholder rights over Nexperia” was the real reason for the supply chain chaos. The company claimed recent Dutch actions were intended to “buy time for Nexperia B.V. to construct a ‘de-China-ized’ supply chain and permanently strip Wingtech of its shareholder rights.”
Meanwhile, the Dutch government, in a move that seemed to offer hope, suspended its state intervention at Nexperia following talks with Chinese authorities in late November. But as Rico Luman, senior sector economist at ING, observed, “The imposed measures to seize the Dutch Nexperia subsidiary have been lifted, but there are still talks ongoing about restoring the corporate structure and relation with parent company Wingtech.” Luman added that the situation is not just about finished chips, but also about the crucial flow of wafers from Europe to China for assembly and testing.
Luman drew a parallel to China’s rare earth export controls, noting, “The Chinese position appears strong again as European manufacturers are dependent on the supplies. And comparable to the rare earths, it’s not fully transparent which buyer is able to qualify for which chip supplies.” The global semiconductor industry, already battered by the pandemic and geopolitical tensions, is now facing yet another test of its resilience and interconnectedness.
As of the end of November 2025, the dispute remains unresolved. Talks are ongoing, but customers across industries continue to report looming production stoppages. The stakes are high—not just for Nexperia and its immediate stakeholders, but for the entire ecosystem of manufacturers, suppliers, and consumers who rely on the steady, predictable flow of these essential chips. Whether diplomacy, corporate negotiation, or sheer necessity will break the deadlock first remains to be seen, but for now, the world is watching and waiting as the clock ticks toward the new year and the specter of empty production lines grows ever larger.
