Dutch Government Invokes Security Law to Seize Semiconductor Firm
The Netherlands has taken the unprecedented step of seizing control of semiconductor manufacturer Nexperia from its Chinese owner, according to reports from Dutch media. Sources indicate the Ministry of Economic Affairs quietly assumed control of the Nijmegen-headquartered company on September 30th using a 73-year-old law that allows state takeovers for security purposes.
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Analysts suggest this represents the most aggressive move yet by European governments to protect strategic industries from Chinese influence. The law, originally drafted during the Cold War era, had never been used until this intervention in the critical semiconductor industry.
Court Suspends Chinese Owner Amid Financial Concerns
One week after the government takeover, an Amsterdam business court suspended Chinese entrepreneur Zhang Xuezheng, known by his nickname “Wing,” from his position, according to court documents. The court appointed a Dutch interim chief executive to lead the company, which had been purchased by Mr. Zhang in 2019 through his holding group Wingtech.
The report states that Dutch executives had raised concerns about financial practices at Nexperia, with the Amsterdam court citing claims that Mr. Zhang was attempting to divert cash from the Dutch company to prop up a struggling Shanghai chip foundry established by Wingtech in 2020. Sources indicate that in September, several financial executives found their access to company accounts revoked and replaced by personnel with limited financial experience.
Multiple Factors Behind the Intervention
Analysts suggest the Dutch government was motivated by multiple concerns, including fears that Mr. Zhang was undermining Nexperia to benefit his Chinese companies. According to the analysis, the government had previously warned the company about risks after the U.S. Department of Commerce placed Wingtech on a sanctions list last year.
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The situation escalated on September 29th when American authorities extended export controls to companies whose majority owners appear on the sanctions list. Reportedly, negotiations aimed at guaranteeing Nexperia’s independence from Mr. Zhang’s Chinese operations had reached an impasse, prompting the government action.
Strategic Importance of Dutch Semiconductor Industry
The Netherlands represents a critical component of Europe’s semiconductor ecosystem, with technological advantages that give it dominance in advanced chip-printing machinery. Nexperia, which was spun off from another major Dutch semiconductor company, generated approximately $2 billion in revenue last year and serves as a significant supplier to the automotive industry.
European countries are increasingly focused on protecting strategic industries from Chinese competition, particularly in the automotive sector where Nexperia plays an important role. The Dutch government had previously demonstrated its commitment to the industry through “Project Beethoven,” a €2.5 billion program announced in 2024 to subsidize domestic chip manufacturing.
Broader European Context and Potential Consequences
The European Union’s Chips Act, adopted in 2023, has yet to significantly increase the bloc’s global market share, according to industry analysts. The Dutch action against Nexperia comes as the EU considers requiring Chinese companies to include technology transfers in their investments—a dramatic reversal from previous policies where Western companies typically transferred technology to Chinese partners.
Experts suggest European nations, while concerned about their industrial future, also face potential retaliation from China. This concern materialized on October 4th when the Chinese government imposed export controls on suppliers to Nexperia, according to trade reports. The situation reflects growing tensions in global technology supply chains as seen in other sectors including nuclear energy development and artificial intelligence infrastructure.
The Nexperia case represents a significant escalation in Europe’s approach to protecting strategic assets, with implications for international business relationships and technology leadership. As major technology companies navigate these changing dynamics, industry observers are watching how other nations might respond to similar challenges in critical sectors.
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