Just last month, the intense technological competition between Washington and Beijing unexpectedly impacted the Netherlands. Under significant pressure from U.S. officials, the Dutch government took decisive action, assuming control of Nexperia, a prominent chip manufacturer with Chinese ownership.
Headquartered in the Netherlands yet owned by China’s Wingtech, Nexperia boasts a sophisticated, worldwide supply chain—a common characteristic of the chip manufacturing industry. The company specializes in designing older generation chips crucial for automotive and electronic applications, employing thousands across Europe, the United States, and Asia. Its operations span from silicon pressing facilities in Britain and Germany to chip assembly and testing centers in China, the Philippines, and Malaysia.
On September 30, the Dutch government announced that all company decisions would now fall under the authority of its Minister of Economic Affairs, Vincent Karremans. This move came just hours after the United States broadened its trade blacklist. This expansion meant Nexperia’s operations would face severe restrictions, as its parent company, Wingtech, was already included on the list.
In a public statement made on Sunday, the Dutch government explained its intervention as a measure to prevent Nexperia’s products from becoming inaccessible during a crisis. However, court documents released in Amsterdam on Tuesday revealed that American officials had been exerting pressure on the Dutch government regarding Nexperia’s ownership for several months prior.
The U.S. Department of Commerce had imposed trade restrictions on Wingtech back in December. By June, American officials communicated to the Dutch Ministry of Foreign Affairs that Nexperia could face similar measures if its Chinese chief executive, Zhang Xuezheng, was not replaced.
According to the court documents, American officials clearly stated, “The fact that the company’s CEO is still the same Chinese owner is problematic.”
Nexperia’s situation highlights a broader struggle within the global chip industry. Both Washington and Beijing are asserting extensive control over the supply chains for semiconductors and vital minerals—components essential for a vast range of technologies, from automobiles to advanced artificial intelligence.
With the U.S. and China increasingly wielding their influence over crucial supply chains, other nations are expected to follow suit, aiming to reduce Chinese ownership of critical technological assets, citing national security concerns, noted Reva Goujon, a director at Rhodium Group. Nexperia, in this context, was an obvious candidate for such intervention.
China has invested billions into bolstering its domestic industries. Consequently, Chinese firms, including state-backed investors who facilitated Nexperia’s sale to Wingtech, aggressively pursued acquisitions of foreign companies specializing in chips and other advanced technologies.
Although Chinese chip manufacturers face challenges in producing the most advanced chips required for sophisticated AI systems, they are responsible for a growing proportion of older generation chips. This trend has sparked apprehension among officials in the United States and Europe, who worry about China’s potential dominance in this segment. Despite being less advanced, these chips are integral to automotive systems and numerous other machines and devices.
Many governments are now determined to reclaim control over these vital supply chains, according to Ms. Goujon.
Ms. Goujon highlighted a sense of “very big regrets,” stating that “All these governments are very uncomfortable with that and would like to see these assets back in their possession.”
Following the Dutch government’s takeover of Nexperia, China’s Ministry of Commerce swiftly responded by issuing a directive on Tuesday, prohibiting Nexperia’s Chinese subsidiaries from exporting certain products. The company confirmed this action in a statement.
Nexperia is actively pursuing an exemption from these new Chinese restrictions, asserting that it “has deployed all available resources to that end,” according to its statement.
While China’s Ministry of Commerce has remained silent on its specific restrictions against Nexperia, spokesperson He Yongqian stated in a Thursday briefing that Washington’s broadened controls have “seriously undermined the security and stability of the global industrial supply chain.”
Ms. He characterized the Dutch government’s action concerning Nexperia as “a clear example of how the American rule harms the legitimate rights and interests of Chinese companies.”
Last week, Beijing further demonstrated its global technological influence by implementing extensive controls on critical minerals—essential for manufacturing chips, cars, missiles, and various other products. These new regulations bore a striking resemblance to the American technology restrictions that China has frequently criticized.
The Chinese government also turned its attention to the shipping industry, which it considers vital for national security and economic growth. On Tuesday, Beijing levied sanctions against American subsidiaries of the South Korean shipping giant Hanwha, alleging their “supporting and assisting” role in the United States’ shipbuilding sector.
This directive took immediate effect, forbidding Chinese companies and individuals from conducting any business with the affected Hanwha units.
According to Ms. Goujon of Rhodium Group, as the power struggle between Washington and Beijing intensifies, governments worldwide will persist in their efforts to reclaim control over critical technology manufacturing. She concluded, “This has been building for a long time.”