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When Vincent Karremans, the Dutch minister of economic affairs, invoked a Cold War-era law that had remained dormant for over seventy years, he likely did not anticipate that it would nearly halt Volkswagen’s production line within days. Yet, that is roughly what happened in the autumn of 2025, when the Netherlands seized supervisory control of Nexperia, a chipmaker headquartered in Nijmegen. Within weeks the dispute had escalated into a full-blown trade conflict with Beijijng, rattled the European car industry, and exposed an uncomfortable truth: Europe’s control over the strategic industries on its soil is far more fragile than it likes to believe. The crisis was, in the words of Karremans himself, “a wake-up call to Europe and the West.” The more revealing question is what China’s furious response tells us about the deepening contest over who really governs Europe’s industrial base.
Nexperia at the centre
Nexperia is relatively unknown, and its products rarely make headlines. The company traces its lineage to the former semiconductor arm of Philips, which was spun off as NXP in 2006. NXP in turn divested Nexperia in 2017. It makes what the industry dismissively calls “legacy chips.” Mosfets, diodes, and other simple components produced in enormous volumes. These are not the cutting-edge 2nm processors of TSMC or Samsung. Yet, Nexperia holds close to ten percent of the global market for such parts and as much as forty percent in some segments. Roughly sixty percent of its sales go to the automotive sector, where its chips control everything from headlights and airbags to ABS systems, fuel injection, and electronic power steering. Without Nexperia, as one report bluntly put it, a car cannot leave the factory.
The unglamorous reputation is also misleading in another way. Legacy chips, precisely because they are robust and widely available, turn up in military hardware as well. Analyst Benedetta Girardi of the Hague Centre for Strategic Studies notes that older weapons systems still rely on older chips and that Nexperia-made components, some of Dutch origin, have been found in downed Russian drones. A chip that runs your dishwasher can also guide a missile. That dual-use quality is part of what made the company a strategic asset worth fighting over.
The Dutch intervention
How did this Dutch company end up under Chinese ownership? Between 2018 and 2019, the Chinese technology group Wingtech acquired Nexperia. The arrangement grew steadily more uncomfortable as the US-China technology war intensified. Wingtech landed on the American entity List in December 2024, and by September 2025, Washington’s so-called “fifty-percent rule” threatened to extend those restrictions to Nexperia itself. On 30 September 2025, the Dutch government acted. Invoking the Wet beschikbaarheid goederen (an availability-of-goods law dating from 1952 and never once used since), Minister Karremans took control of key decisions at the company. A day later, the Enterprise Chamber of the Amsterdam court suspended Wingtech’s founder and Nexperia chief executive Zhang Xuezheng over alleged mismanagement. The court found that Zhang had forced Nexperia to place some $200 million in wafer orders with his own troubled company when the firm needed only $70-80 million worth. Zang has a history of controversy. He had served seventeen months in prison in 2005 for stealing trade secrets from his former employer ZTE and was fined nearly a million euros for concealing trades on the Shanghai exchange.
From The Hague’s perspective, the fear was straightforward. The fear was that China would siphon off “crucial technological knowledge and capabilities.” Karremans later said he had intelligence that operations in Hamburg were being moved to China. From Beijing’s vantage point, however, a legitimately acquired European company was simply being expropriated from its rightful owner.
China’s response
China’s retaliation was swift. Days after the Dutch move, Beijing banned the export of Nexperia chips from China. Here lay the vulnerability. Although Nexperia’s “front-end” wafer fabrication takes place in Germany and the United Kingdom, the final assembly and testing of an estimated seventy to eighty percent of its chips happens in China. By switching off that flow, Beijing could choke European supply chains overnight. The message was unmistakable. Chinese commentators framed the affair as a historic turning point. “It marks the closing of a geopolitical iron curtain over the chip industry,” wrote financial commentator Jiu Yuyun, arguing that cross-border mergers and acquisitions were now becoming “victims of technological nationalism.” Beijing’s official line accused the Netherlands of “politicising economic and trade issues” and “stretching the concept of national security.” The subtext was clear: challenging Chinese business interests on European soil would carry a price.
And it worked. After a meeting between Donald Trump and Xi Jinping in South Korea cleared the way, China allowed exports to resume on 1 November. Weeks later, Karremans suspended his intervention, citing improved relations. Analysts were blunt about what the represented. Maaike Okano-Heijmans of the Clingendael Institute called the climbdown a case of “yielding to Chinese pressure” and warned that the episode had handed Beijing a victory. “For China, this is confirmation that they hold the stronger cards.”
Not an individual incident
It would be comforting to treat Nexperia as an incident. However, it is not. The same script, a Chinese-owned firm in a strategic sector, fears knowledge draining eastward; a belated government scramble has played out repeatedly. Ampleon, another former NXP offshoot involved in 6G development, was quietly the subject of a similar intervention that ended in a 2025 settlement allowing continued Chinese ownership under safeguards against leakage of intellectual property. In Britain, the government forcibly unwound Nexperia’s own 2021 takeover of the Newport Wafer Fab on national-security grounds. And in Eindhoven, the photonics firm SMART Photonics rejected a Chinese investor after consulting the ministry, accepting a €20 million state loan to stay in Dutch hands. Its chief executive now speaks of cybersecurity intrusions and a deliberate “need-to-know” secrecy culture, having grown “less naïve about how far the arm of the Chinese state reaches.”
Tellingly, when Nexperia was sold in 2017, the Netherlands had no legal instrument to screen the deal. The investment-screening law that would allow such scrutiny did not yet exist. Europe, in other words, sold the door and is now arguing about the lock.
Where does Europe draw the line?
More than half a year on, the wreckage is still visible and ongoing. Nexperia’s Dutch and Chinese arms now operate as two warring companies. Wingtech has launched an arbitration claim against the Netherlands seeking compensation for some $8 billion in alleged damages. Nexperia is pouring investment into Malaysian capacity to reduce its dependence on China, while customers must now navigate an obstacle course. First, companies must buy wafers in Germany, ship them to China for assembly, and pay in yuan through a Chinese bank account, all of which are subject to Beijing’s dual-use screening. The Jetten cabinet, meanwhile, is signalling a desire for rapprochement, with a trade mission to China in the works.
The Nexperia affairs leave Europe facing a genuine dilemma rather than an easy lesson. Acting decisively to protect a strategic industry triggered economic pain and diplomatic damage. Ultimately, it may have also bolstered Beijing’s position. Doing nothing, however, would have meant ceding control of critical technology by default. The deeper revelation of China’s response is that economic interdependence has become a weapon, and that Europe has been bringing balance-sheet logic to what is now a geopolitical fight. The question of how to defend strategic industries without permanently rupturing the relationship with one of the continent’s most important trading partners remains unanswered, however. The Nexperia affair has made it clear that Europe can no longer afford to ignore the question.
Please read the following for more information
García-Herrero, A. (2025, December 23). The Nexperia crisis: a wake-up call for Europe’s approach to Chinese investment
Qingrui, C. (2026). Chinese court accepts Wingtech lawsuit to restore control of Nexperia assets: company
Chen, L. (2026). Netherlands looks to move past Nexperia dispute with China, Dutch minister says
