The Dutch government has taken control of Chinese-owned chipmaker Nexperia, citing governance shortcomings that threaten European economic security in a rare intervention.
In an unprecedented move, the Netherlands has invoked emergency powers to assume control of Nexperia, a Chinese-owned semiconductor manufacturer. The intervention highlights growing Western concerns about technological security and Chinese corporate influence in critical industries.
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Dutch Government Assumes Control of Nexperia in Unprecedented Move
The Dutch government has taken the extraordinary step of seizing control of Nexperia, a major semiconductor manufacturer owned by China’s Wingtech Technology, citing significant concerns about corporate governance and potential risks to European economic security. This “highly exceptional” intervention represents one of the most direct actions taken by a Western government against Chinese ownership in the critical semiconductor sector.
Economic Affairs Minister Micky Adriaansens announced the decision late Sunday, explaining that the government had invoked the rarely used Goods Availability Act to intervene directly in Nexperia’s operations. The company, which produces chips essential for automotive and consumer technology applications, will now operate under government supervision to ensure the continuity of its critical technological capabilities within Europe.
Governance Concerns Prompt Unprecedented Intervention
The Dutch ministry cited serious corporate governance shortcomings that “posed a threat to the continuity and safeguarding on Dutch and European soil of crucial technological knowledge and capabilities.” While providing limited specific details, officials indicated that these governance issues could potentially compromise the security of semiconductor technology that’s vital to both Dutch and European economic interests.
According to the government statement, losing control over these technological capabilities “could pose a risk to Dutch and European economic security.” The intervention allows the Minister of Economic Affairs to block or reverse company decisions that might harm Nexperia’s future as a Dutch and European enterprise or threaten the preservation of critical semiconductor value chains in Europe.
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Chinese Ownership and Geopolitical Implications
Wingtech Technology, the Chinese parent company that acquired Nexperia in 2018, strongly condemned the Dutch government’s action as “an excessive intervention based on geopolitical bias rather than a fact-based risk assessment.” The company argued that the decision was made under the “unfounded pretext of national security” and represents the politicization of commercial matters.
The move occurs against the backdrop of escalating technological tensions between China and Western nations. Chinese Foreign Ministry spokesman Lin Jian responded to the decision by stating that China “consistently opposes the overstretching of national security concepts and discriminatory practices targeting companies from specific countries.” The intervention reflects broader Western concerns about Chinese influence in critical technology sectors, similar to recent developments where companies like Oura achieved significant valuation through strategic positioning in competitive markets.
Market Impact and Corporate Response
The announcement triggered immediate financial consequences, with Wingtech shares plunging 10% – the daily limit – on the Shanghai Stock Exchange. Wingtech informed investors that the Dutch decision “temporarily restricts” its control over Nexperia, though the company emphasized that regular production operations would continue uninterrupted.
Nexperia has vowed to pursue “legal remedies” to challenge the government’s action and protect shareholder interests. The company stated it is “actively contacting relevant government departments to seek support” while maintaining its commitment to operational continuity. This corporate response mirrors situations where leadership changes, such as Sam Altman’s policy adjustments, required careful navigation of regulatory environments.
Broader Context of Semiconductor Security Concerns
This intervention follows a pattern of increasing Western scrutiny of Chinese involvement in semiconductor technology. In 2023, the British government blocked Nexperia’s bid to acquire Wales-based Newport Wafer Fab, citing similar national security concerns. More recently, the U.S. Commerce Department included Wingtech in an expanded list of Chinese technology companies subject to export controls.
U.S. Commerce Secretary Gina Raimondo had previously justified such measures as necessary to impair China‘s ability to use advanced technologies that “pose a risk to our national security.” These developments occur alongside major industry investments, including GSK’s substantial US investment in technology sectors, highlighting the strategic importance governments place on controlling critical technological assets.
European Union Support and Next Steps
The European Union has expressed support for the Dutch action, with European Commission spokesman Olof Gill confirming that the EU had been in “close contact” with Dutch authorities and would work with the Netherlands on “next steps” to secure crucial technological capabilities within Europe. This coordinated approach reflects growing European consensus on the need to protect strategic industries from foreign control that might compromise economic security.
The Dutch government emphasized that its primary objective is to prevent a situation where Nexperia’s chips would “become unavailable in an emergency,” ensuring the continued availability of critical semiconductor components for European industries. This precautionary approach aligns with broader economic strategies, similar to considerations behind monetary policy adjustments that aim to maintain economic stability during uncertain times.
Historical Context and Industry Significance
Nexperia has deep roots in the European semiconductor industry, having been spun off from Phillips Semiconductors two decades ago before its acquisition by Wingtech in 2018. The company’s location in the Dutch city of Nijmegen places it at the heart of Europe’s technology manufacturing sector, making its governance and technological integrity matters of significant regional concern.
The Dutch intervention represents one of the most substantial applications of national security powers in the European technology sector and may establish precedents for how Western nations address similar concerns about foreign ownership in critical industries. As semiconductor technology becomes increasingly central to economic and national security, such interventions highlight the delicate balance between open markets and strategic protectionism in the global technology landscape.
