The global semiconductor industry, already fraught with geopolitical tension, has found itself at the epicenter of a new crisis as the saga surrounding Nexperia, a Dutch chipmaker owned by China’s Wingtech Technology, continues to unfold. What began as a matter of corporate control has rapidly escalated into a flashpoint in the US-China tech war, exposing Europe’s increasingly precarious position in the global chip supply chain and threatening automotive production lines from Germany to Japan.
At the heart of this dispute lies Nexperia’s sprawling assembly site in Dongguan, China. Following a major upgrade in 2018, the facility ramped up its annual production capacity to a staggering 90 billion units, making it the largest assembly site in Nexperia’s global network, according to the South China Morning Post. This site, emblematic of seamless global manufacturing, has suddenly become a pawn in a high-stakes geopolitical game, pitting the Dutch government against its Chinese owner in a conflict that has rippled across the world’s semiconductor markets.
The trouble began in earnest on September 30, 2025, when the Netherlands government, citing concerns over technology transfers to China, seized 99% of the shares of Nexperia. Dutch Economy Minister Vincent Karremans, in comments to The Guardian, defended the move, stating he had "no regrets" about the decision. China’s response was swift and severe: Beijing imposed export controls on Nexperia’s China-made products, a move that sent shockwaves through automotive supply chains stretching from Germany to Japan, as reported by Reuters.
The Chinese commerce ministry did not mince words, issuing a statement on November 14, 2025, that it was "extremely disappointed and strongly dissatisfied" with Karremans’ remarks. The ministry accused the Dutch side of improper intervention, declaring, "It was the Dutch side’s improper intervention — seizing 99% of the shares of a wholly owned private enterprise — that, like a stone thrown into calm waters, created a huge ripple effect and became the real source of turbulence and disruption to the global semiconductor supply chain."
As the diplomatic rhetoric intensified, the practical consequences quickly became apparent on the production floor. In late October 2025, parts of Nexperia’s Dongguan production lines sat idle due to a wafer shortage. According to two factory workers interviewed by the South China Morning Post, about a third of the machines had been turned off, echoing earlier reports of a sudden halt in wafer shipments from Nexperia’s fabrication plants in the United Kingdom and Germany. These wafers, essential for assembling integrated circuits used in everything from computing to automotive power switches, had been the lifeblood of the Dongguan facility.
With the shipments stopped amid internal conflict, Nexperia’s Chinese plant found itself unable to operate at full capacity. The ripple effects were immediate: a global car chip shortage began to take hold, highlighting just how intertwined—and vulnerable—the world’s semiconductor supply chains have become. For European automakers and their counterparts in Asia, the disruption was a stark reminder of the risks inherent in a system where 70% of European-produced Nexperia chips are packaged in China, as noted by Reuters.
Beijing, for its part, has sought to frame the dispute as a cautionary tale about the dangers of politicizing global trade. The Chinese commerce ministry’s statement went further, claiming that it had helped ease the crisis by issuing export exemptions for civilian-use chips. However, it warned that the supply chain remained fragile because, in its view, "the Dutch side had taken no real action to solve the problem." The ministry accused Nexperia Netherlands not only of refusing to ship wafers to Chinese buyers but also of blocking Chinese foundries from supplying customers, moves it said had heightened risks for automakers and escalated what was once a corporate dispute into a "systemic risk."
The timing of the dispute could hardly be worse. A Dutch delegation, including senior officials from the economy ministry, was scheduled to visit Beijing in the days following the ministry’s statement, hoping to find a compromise and resolve the impasse. According to Reuters, key issues on the table included the ongoing refusal of Nexperia Netherlands to ship wafers to its Chinese assembly plant and the Dutch court’s suspension of the company’s former CEO and Wingtech founder Zhang Xuezheng over alleged mismanagement.
China has not been shy about its expectations for the upcoming talks. The commerce ministry concluded its November 14 statement with a pointed directive: "Come with the aim of solving problems, not creating new ones." It urged The Hague to arrive in Beijing with "constructive proposals" rather than repeating past arguments, and even called on other EU countries to pressure the Netherlands into making concessions.
For Europe, the Nexperia saga is more than just a corporate or diplomatic dispute—it is a vivid illustration of the continent’s eroding industrial sovereignty and the mounting difficulty of maintaining geopolitical neutrality amid escalating US-China rivalry. As the South China Morning Post observed, Europe’s once-vaunted position as a neutral broker in global trade is being steadily undermined. China’s foundational role in manufacturing, particularly in the semiconductor sector, has become "too large to fail and too complex to legally unwind."
The episode has also exposed the fragility of global supply chains that rely on the free flow of goods and technology across borders. With the Dutch government’s intervention and subsequent Chinese export controls, what was once a seamless chain has become a source of uncertainty for industries worldwide. The global car chip shortage—exacerbated by idled production lines in Dongguan—serves as a potent reminder that decisions made in boardrooms and government offices in The Hague or Beijing can have far-reaching consequences for workers and consumers thousands of miles away.
As the Dutch delegation prepares to sit down with Chinese officials, the stakes could hardly be higher. The outcome will not only determine the fate of Nexperia and its employees but could also set a precedent for how future disputes between Europe and China are handled. Will compromise prevail, or will the rift deepen, further destabilizing an industry that underpins modern life?
For now, the world watches and waits, keenly aware that the chips—both literal and metaphorical—are down.
