Dutch Government Uses Cold War-Era Law To Seize Control Of Chinese-Owned Chipmaker Nexperia Citing National Security Concerns

The Dutch government has taken control of Nexperia, a Chinese-owned semiconductor manufacturer based in Netherlands' Nijmegen, using a rarely deployed Cold War-era emergency law for the first time.

The Goods Availability Act allows the Dutch government to intervene in private companies to ensure critical goods remain available during crises, marking what officials described as a "highly exceptional" move to safeguard European chip supplies.

The intervention, which took effect on 30 September, came after the Ministry of Economic Affairs observed what it called "serious governance shortcomings and actions" at Nexperia, a subsidiary of Shanghai-listed Wingtech Technology.

The Dutch government cited concerns that crucial technological knowledge could be transferred to China, posing risks to Dutch and European economic security, particularly affecting the automotive industry which relies heavily on Nexperia's chips.

Nexperia specialises in high-volume production of semiconductors used in vehicles and consumer electronics, employing 12,500 people across Europe, Asia and the United States.

Wingtech acquired the company for $3.63 billion in 2018, but was placed on the US entity list in December 2024 for allegedly aiding China's efforts to acquire sensitive semiconductor manufacturing capabilities.

An Amsterdam court suspended Wingtech chairman Zhang Xuezheng from his executive roles at Nexperia following a request from senior European managers who raised governance concerns.

The Dutch government can now block or reverse company decisions deemed harmful to national interests for up to one year, though daily manufacturing operations will continue.

Beijing has strongly opposed the takeover, with Foreign Affairs spokesman Lin Jian stating China "consistently opposes the overstretching of national security concepts and discriminatory practices targeting companies from specific countries".

Wingtech called the intervention "excessive interference driven by geopolitical bias" and vowed to pursue legal remedies.

China has since retaliated by blocking Nexperia from exporting products manufactured in China, further escalating tensions in the global semiconductor industry.

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