As the Dutch government moves to take over Chinese semiconductor corporations Nexperia, based in eastern Nijmegen, analysts say economic-security-first thinking is strengthening across Europe. Under U.S. pressure and amid accelerating technological decoupling from China, Europe has chosen to protect strategic industries over free-trade principles.
According to the Financial Times (FT), on the 13th (local time) the Dutch government, for the first time ever, invoked the "Goods Availability Act" and said it would effectively take over Nexperia, a subsidiary of China's Wingtech Technology. The law allows the Dutch government to intervene in private corporations to ensure access to essential goods in preparation for emergencies.
Through this move, considered an exceptionally rare case, the Dutch government has effectively taken full control of Nexperia. The Dutch Minister of Economic Affairs can block or overturn decisions by Nexperia's board, and the government will gain control over Nexperia and its subsidiaries' asset and intellectual property, business, and workforce. Routine production activities are expected to continue.
In a statement, the Dutch government said that "serious corporate governance flaws and concerns over technology leaks have been identified," and explained the decision by saying, "If core semiconductor technology is transferred to China, the supply stability of Europe's broader industry could collapse." The measure was activated on Sept. 30, but was announced later, according to reports.
Nexperia is a semiconductor maker for automobiles, home appliances, and industrial electronics, not for military-grade advanced semiconductors, and was established after being spun off from "NXP Semiconductors," the successor to the former "Philips Semiconductors." While not cutting-edge chips, it produces chips widely used across Europe. The company became a Chinese corporations when it was acquired by Wingtech in 2017 with Dutch government approval, which at the time was seen as a symbol of an open investment environment, but as the global semiconductor supply crunch in 2021 and the U.S.-China tech hegemony competition intensified, there were self-critical voices saying the "acquisition approval was a strategic mistake."
The U.S. is also seen as having strongly influenced this move. According to the Wall Street Journal, in June the U.S. Commerce Department's Bureau of Industry and Security (BIS) stressed in a meeting with the Dutch Foreign Ministry that "to obtain an exception to the U.S. 'entity list' export controls, the (Nexperia) chief executive officer (CEO) must be replaced." Last year, the United States placed Wingtech on the export-control entity list as a security threat corporations, and as its subsidiary Nexperia became subject to the same restrictions, the Dutch government is said to have made its decision.
In addition, the government is said to have decided to intervene after Zhang Xuezheng, a former researcher at Chinese tech firm ZTE and Wingtech's CEO, showed moves to transfer European factories and technology to the company's China headquarters. As a result, Wingtech's share price plunged by more than 10% in a single day on the Shanghai Stock Exchange, and the company hinted at a hard-line response, saying it would "protect its legal rights." The China Semiconductor Industry Association (CSIA) also issued a statement opposing the move, saying, "This measure selectively and discriminatorily targets Chinese corporations and undermines the international free-trade order."
There are also predictions that this situation will further strengthen Europe's "de-risking from China" stance. Earlier, France in 2023 confiscated equity in the semiconductor corporations Omic that included Chinese equity, and the United Kingdom in 2022 ordered the sale of Nexperia's Newport Wafer Fab plant. Sasha Kourtial, a researcher at the Jacques Delors Institute, a European political-security think tank, said, "This decision shows that economic security can take precedence over free-market principles," adding, "This could prompt other European countries to consider similar measures."