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The Netherlands-based chipmaker Nexperia has become the focal point of an escalating standoff between the European Union, the United States, and China, sparking a near-crisis for the global auto industry.
In October, the Dutch government seized control of Nexperia — a subsidiary of China’s Wingtech Technology — citing national security concerns. The move prompted Beijing to block exports of Nexperia products from its factories in China, disrupting a vital supply line for automakers worldwide.
Emergency meetings are underway in Europe this weekend to contain the fallout, while Washington and Beijing are reportedly exploring a framework that would allow Nexperia’s China-based facilities to resume exporting critical automotive chips.
For now, the automotive supply chain remains on edge, as manufacturers brace for potential shortages of essential components.
Political Crossfire
The dispute has also exposed growing fissures among Western allies. On October 22, the Dutch intelligence serviceprivately warned its U.S. counterparts that intelligence-sharing on China “should be approached with greater caution,” even as it quietly teamed up with German and French intelligence agencies to monitor Nexperia — known as Anshi Semiconductor in China — to avoid being accused of “going soft” by its allies.
A day earlier, on October 21, Dutch Economy Minister Micky Adriaansens spoke with Chinese officials, maintaining that the Nexperia issue was purely a matter of “independent judicial decision.” Yet, the situation soon grew more complicated: Germany’s Rhein Group filed a €1.4 billion lawsuit against the Dutch government, alleging “reckless policymaking” that disrupted its chip supply chain.
The numbers tell an even starker story. Nexperia ships around 110 billion chips annually, and roughly 40% of the world’s automotive transistors and diodes come from its production lines. If that supply is cut, automakers estimate they have only three to four weeks of inventory left.
The impact is already being felt: Honda’s plant in Mexico halted production on October 31 due to parts shortages, while the Alliance for Automotive Innovation in the U.S. warned that “if the disruption lasts another two weeks, North America’s Christmas new car rollout will collapse.”
Why Nexperia Matters
Nexperia produces billions of “foundation chips” — including transistors, diodes, and power management components — that are manufactured in Europe, then assembled and tested in China before being re-exported to clients across Europe and other regions. Roughly 70% of chips made in the Netherlands are sent to China for completion and re-export.
These basic components are critical to any device that relies on electricity. In vehicles, they control everything from battery-motor connections and lighting systems to brakes, airbags, sensors, and infotainment units.
Nexperia recorded $2 billion in sales last year, underscoring its global importance as a foundational supplier to the electronics and automotive industries.
How the Dispute Escalated
The crisis traces back to September, when the Dutch government invoked a Cold War-era law to take control of Nexperia amid suspicions that its Chinese parent Wingtech intended to transfer intellectual property to another affiliated entity. A Dutch court also suspended Nexperia’s CEO, Zhang Xuezhen, who founded Wingtech, citing mismanagement concerns.
Beijing responded by tightening export restrictions on Nexperia-made chips from its domestic plants, a move widely seen as retaliation. The restrictions left carmakers scrambling, with Nexperia warning clients it could no longer guarantee supply continuity.
The dispute has deepened against the backdrop of heightened Western scrutiny of Chinese-linked technology firms. The U.S. government has expanded its export control measures to limit technology transfers to companies with Chinese ownership. In December 2024, Washington blacklisted Wingtech, accusing it of assisting China’s efforts to acquire sensitive semiconductor assets.
Signs of a Breakthrough
Diplomatic efforts to ease tensions have accelerated in recent days.
On Friday, reports indicated that the U.S. was preparing to announce a deal allowing Nexperia to resume exports, following discussions between President Donald Trump and Chinese leader Xi Jinping. Sources familiar with the matter described the deal as a framework agreement to restore limited shipments under strict oversight.
Then on Saturday, China’s Ministry of Commerce said it would grant exemptions for some Nexperia chip exports, though details of which products would qualify remain unclear.
“We will comprehensively consider the actual situation of the enterprise and exempt eligible exports,” the ministry said in a statement.
If implemented, the exemptions could temporarily stabilize supply chains and relieve pressure on automakers, but the underlying dispute over ownership, technology transfer, and security oversight remains unresolved.
For now, Nexperia’s fate has become a litmus test for the future of global semiconductor cooperation — and a stark reminder of how geopolitical rivalries can reverberate through industries that power the modern economy.
