The Dutch government has assumed control over Nexperia, a prominent Chinese-owned semiconductor manufacturer headquartered in Nijmegen, invoking unprecedented legal powers to protect Europe's technological and economic security.
This move, announced late Sunday, stems from concerns over governance issues that could jeopardize the availability of critical chips used in automobiles and consumer electronics.
The intervention invokes the Goods Availability Act, a rarely used law allowing the state to intervene in exceptional circumstances threatening economic stability or critical supply chains.
Under the order, the Minister of Economic Affairs, Vincent Karremans, can now reverse or block decisions by Nexperia's management if they harm the company's continuity, its operations in the Netherlands or Europe, or the emergency supply of essential goods.
Production at Nexperia facilities continues uninterrupted, with the government emphasizing that the measure aims solely to mitigate identified risks.
The Dutch Economic Ministry cited acute signals of serious governance shortcomings within the firm, which it said threatened the safeguarding of crucial technological knowledge and capabilities on Dutch and European soil.
"Losing these capabilities could pose a risk to Dutch and European economic security," the ministry stated, without providing further specifics on the nature of the shortcomings.
A spokesperson for the ministry confirmed there was no additional information available.
Nexperia, acquired by Chinese parent company Wingtech for $3.63 billion in 2018 from the Dutch electronics group Philips, specializes in producing diodes, transistors, and advanced wide-gap semiconductors vital for electric vehicles, chargers, and AI data centers.
The company maintains compliance with all existing laws, regulations, export controls, and sanctions regimes.
Wingtech, in response, described the Dutch action as excessive interference driven by geopolitical bias and noted that its operations remain uninterrupted while in close communication with suppliers and customers.
The parent firm's Shanghai-listed shares dropped 10 percent on Monday following the announcement.
Wingtech further revealed that its chairman, Zhang Xuezheng, was suspended from Nexperia's boards by an Amsterdam court order on October 6, with an independent non-Chinese individual appointed to hold a deciding vote in his stead.
The company is consulting lawyers on potential legal remedies and seeking government support to protect its rights.
This development escalates existing strains in EU-China relations, already strained by trade disputes and Beijing's ties with Russia.
It echoes prior Western scrutiny of Wingtech, including its placement on the U.S. entity list in December 2024 for alleged involvement in acquiring sensitive semiconductor capabilities, and a forced divestiture of a U.K. facility in Newport due to national security concerns.
The Dutch ministry stressed the decision was independent, with no U.S. involvement, describing the timing as coincidental.
Nexperia's operations, kept at arm's length from Wingtech, continue to adhere to international rules despite these challenges.
As global battles over semiconductor intellectual property intensify, this rare state intervention underscores Europe's determination to secure its vital technology sector.