Behind the Shift in Dutch Policy: An In-Depth Analysis of the Control Struggle over Nexperia Semiconductor
Introduction
On September 30, 2025, the Dutch government suddenly froze the assets of Nexperia Semiconductor, citing “serious governance deficiencies” and potential national security risks. This decision was like a stone thrown into a calm lake, creating ripples throughout the global semiconductor supply chain. The Amsterdam Enterprise Court immediately suspended the board position of Nexperia’s CEO, Zhang Xuezheng, and appointed an independent non-Chinese director with decisive voting rights.
However, just over a month later, on November 7, Bloomberg reported that the Dutch government was preparing to suspend a ministerial order that authorized it to block or modify decisions made by Nexperia Semiconductor after restoring exports of critical chips to China.
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This dramatic turn in the struggle for control of a multinational enterprise not only reflects the complexity of geopolitical games but also reveals the deep contradictions between supply chain security and business rules in the era of globalization. As a leading player in the global power semiconductor market, Nexperia holds approximately 40% of the automotive discrete device market share, and its fate directly impacts the stable operation of the global automotive industry. What considerations underlie the Dutch government’s policy shift? What are the bottom lines and trump cards in the negotiations? How will this event reshape the global semiconductor industry landscape?
1. Development of Events: From Forced Takeover to Policy Shift
1.1 The Sudden Action of the Dutch Government
On September 30, 2025, the Dutch Ministry of Economic Affairs and Climate Policy issued a ministerial order to Nexperia Semiconductor, requiring all 30 global entities, including subsidiaries, branches, and offices, to make no adjustments to their assets, intellectual property, business, or personnel for a period of one year.
This decision was based on the Goods Availability Act, enacted in 1952, which was established against the backdrop of post-World War II reconstruction in Europe and the geopolitical situation during the Cold War, granting the government broad powers to intervene in the economy under special circumstances.
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The Dutch government’s intervention was swift and thorough. According to court documents released by the Amsterdam Court of Appeal on October 14, the Dutch Foreign Ministry had met with the U.S. State Department as early as June 2025, where the U.S. explicitly requested the “replacement of the Chinese CEO of Nexperia in exchange for an exemption from the entity list.” On October 7, the Amsterdam Enterprise Court made a final ruling to extend the temporary relief measures until the investigation was completed, continuing to suspend Zhang Xuezheng’s positions and appointing a foreign independent director to hold decisive voting rights, with Nexperia’s shares (except for one share) placed in third-party custody.
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1.2 China’s Precise Countermeasures
In response to the Dutch forced takeover, the Chinese Ministry of Commerce quickly implemented precise countermeasures. On October 4, 2025, the Ministry of Commerce issued an export control announcement prohibiting Nexperia’s Chinese company and its subcontractors from exporting specific finished parts and subcomponents. The brilliance of this measure lies in its targeted and flexible approach, primarily aimed at those entities that had to suspend cooperation with Nexperia under pressure from the Dutch government.
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More strategically significant was Nexperia China’s announcement of independent operations. On October 18, Nexperia Semiconductor’s Chinese company announced it would refuse to comply with “external instructions,” emphasizing its status as an independently operating Chinese enterprise.
Nexperia China quickly took over operations: salaries were paid directly by domestic companies, completely severing financial ties with the Dutch headquarters; core management systems were replaced, switching from European ERP software to domestic alternatives; and the supply chain system was restructured, shifting from partnerships with Infineon and STMicroelectronics to collaborations with domestic companies like SMIC and Hua Hong Semiconductor.
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1.3 The Full-blown Supply Chain Crisis
The Dutch government’s forced takeover and China’s countermeasures quickly triggered a chain reaction in the global automotive supply chain. Although Nexperia is registered in the Netherlands, nearly 40% of its core components rely on the Chinese supply chain, and about 80% of its chip packaging and testing capacity is located in China. The export controls imposed by the Chinese Ministry of Commerce immediately put Nexperia’s global production lines at risk of paralysis.
European automakers were the first to feel the severity of this crisis. The German automotive giant Volkswagen notified its employees that due to the interruption of Nexperia’s chip supply, its core factory in Wolfsburg would suspend production starting Wednesday, with production lines for globally popular models like the Golf and Tiguan forced to halt, potentially incurring daily losses of up to 40 million euros.
Supply chain risk analysis company Prewave reported that 86% of leading European companies rely on Nexperia for supplies, with the German automotive industry facing a chip shortage exceeding 8%. If the supply interruption continues for three months, losses could exceed 20 billion euros, putting 100,000 jobs at risk.
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1.4 The Subtle Change in the Role of the United States
The role of the United States in this game is crucial and dramatic. On September 29, 2025, the U.S. issued new export control regulations that expanded the scope to subsidiaries with over 50% Chinese ownership, directly leading to the Dutch government’s intervention in Nexperia.
However, just a month later, on October 30, after U.S.-China consultations, the U.S. announced a one-year suspension of this rule, with China simultaneously suspending related countermeasures.
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The U.S. policy shift is interpreted as a strategic use of negotiation leverage. From a broader perspective, the fundamental reason for the U.S. introducing the 50% ownership penetration rule on September 29 was to create leverage for U.S.-China trade negotiations.
This “flip-flop” by the U.S. directly undermined the rationale for the Dutch government’s takeover of Nexperia.
1.5 The Reaching of the China-Europe Coordination Memorandum
After more than a month of confrontation, China and Europe reached a temporary coordination memorandum on the rare earth and semiconductor supply chain on November 3, 2025, which is valid for six months and will be renegotiated based on market changes.
The core content of this memorandum includes: the Dutch side must restore the original CEO Zhang Xuezheng to his position by November 7, and fully lift the restrictions on Nexperia’s core assets and business authorization to China by November 13; the Chinese side will simultaneously initiate the processing of backlogged orders at the Dongguan factory, prioritizing the supply of automotive chips and other essential needs, and open a “72-hour fast approval channel.”
This coordination memorandum provided an important diplomatic basis for the Dutch government’s policy shift. Dutch Minister of Economic Affairs Vincent Karremans stated on November 6 that he believed that computer chips produced by Nexperia would be delivered to customers in Europe and other parts of the world in the coming days.
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2. The Logic of Negotiation: Interests, Power, and Bottom Lines
2.1 The Dutch Government: A Difficult Balance Between Security and Economy
The Dutch government’s policy shift reflects a complex game between geopolitical pressure and economic interests. On the surface, the Dutch government claims that Nexperia has “serious governance deficiencies,” fearing that intellectual property and business secrets cannot be fully retained in China, emphasizing a stance of “necessary evil” and “only choice.”
The Dutch Ministry of Economic Affairs distorted the negotiation process in court as a “unilateral compliance rectification,” accusing Nexperia of “improperly transferring capacity, financial resources, and intellectual property to other entities.”
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However, a deeper analysis reveals that the Dutch government’s true motives are more complex. According to insiders, part of the intervention stemmed from the restructuring plan promoted by former CEO Zhang Xuezheng, which included optimizing European operations, potentially closing the Munich R&D center, and shifting some manufacturing to China—regulators believed these proposals posed a risk of “key technology outflow.”
But the deeper reason lies in the Dutch semiconductor industry’s heavy reliance on U.S. technology. After the U.S. placed Nexperia on the export control list, the Netherlands faced enormous geopolitical pressure.Essentially, the Dutch government’s policy shift was a compromise to real pressures. Faced with the crisis of production stoppages in the European automotive industry and the sudden shift in U.S. policy, the Dutch government had to reassess the sustainability of its hardline stance. Analysts pointed out that the Dutch government overestimated the control of political intervention over technological assets and underestimated China’s resilience and speed of substitution in the supply chain, mistakenly trusting U.S. ally commitments.
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2.2 The Chinese Ministry of Commerce: Precise Countermeasures and Flexible Responses
The response strategy of the Chinese Ministry of Commerce demonstrated a high level of strategic wisdom. The export control measures announced on October 4 appeared severe but were, in fact, precise: targeting only the parts under Dutch control within the Nexperia system, without affecting other companies. However, China did not close off all avenues; on November 1, the Ministry of Commerce announced that it would grant exemptions for “qualified export applications.”
This “carrot and stick” strategy reflects the mature diplomatic thinking of the Chinese government. On one hand, it pressured the Dutch government through export controls, forcing it to reconsider the consequences of the forced takeover; on the other hand, the exemption mechanism provided a “way out” for European companies, preventing further deterioration of the supply chain crisis. China’s goal was clear: primarily targeting those entities that had to suspend cooperation with Nexperia under pressure from the Dutch government; for those willing to continue cooperating with Nexperia or caught in difficulties due to Dutch policies, China provided support through “exemptions,” dividing the opponent’s camp and consolidating China’s image as a “reliable supply chain.”.
2.3 Nexperia China: From Passive Defense to Active Offense
Nexperia China’s independent operation strategy demonstrated strong adaptability and strategic determination. Faced with the threat of supply interruption from the Dutch headquarters, Nexperia China not only did not yield but accelerated its process of autonomy. On October 23, Nexperia Semiconductor’s Chinese subsidiary announced it would resume supply, but only for the Chinese market, and all transactions would be settled in RMB.
This decision has far-reaching strategic significance. By using RMB for settlements, Nexperia China effectively severed the financial channel with its parent company, establishing an independent loop for capital flow, logistics, and information flow. The company can autonomously complete capacity scheduling, inventory distribution, and receivables management without needing authorization from the headquarters, forming a de facto independent operating entity.Data shows that Nexperia China incurs over 200 million yuan in exchange losses annually due to fluctuations in the U.S. dollar exchange rate; switching to RMB eliminates this cost.
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Nexperia China’s confidence stems from its complete industrial chain layout. The Dongguan factory accounts for 70%-80% of global packaging and testing capacity, producing 85 billion chips annually, while the Dutch headquarters has only the nominal status of a “registered location.” Ironically, Nexperia China’s revenue surged to 4.3 billion yuan in Q3 2025, accounting for nearly half of the global share, while the Dutch headquarters had to rely on the Chinese factory for “blood supply.”
2.4 European Automakers: Struggling Between Supply Chain Security and Business Interests
European automakers find themselves in the most passive yet influential position in this game. As major customers of Nexperia, European automakers are highly dependent on Nexperia’s products. Nexperia holds about 40% of the automotive chip market share in Europe, with Volkswagen using over 50 chips from Nexperia in each vehicle, and BMW’s electric models completely relying on its power management modules.
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Faced with the threat of supply chain disruption, European automakers have taken proactive self-rescue measures. Sixteen European automakers jointly pressured the Dutch government to resolve the Nexperia issue as soon as possible. Hildegard Müller, president of the German Automotive Industry Association (VDA), clearly stated that if the chip supply interruption from Nexperia cannot be effectively resolved in the short term, the German automotive industry could even face a complete production halt.
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The pressure from European automakers became a significant factor driving the Dutch government’s policy shift. Faced with daily losses of 40 million euros and the potential risk of a complete production halt, European automakers had to bypass the Dutch government and seek solutions directly from China. After seeing Nexperia China’s announcement, the German side was the first to approach China, hoping to obtain an exemption for chip supplies.
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2.5 The United States: The Geopolitical Game Master
The United States plays a crucial yet complex role in this game. On the surface, the U.S. exerts pressure on Chinese companies through export controls and the “50% penetration rule,” attempting to curb the development of China’s semiconductor industry. However, a deeper analysis reveals that the U.S. strategy is more about using this as a negotiation chip rather than a genuine sanction tool.
Recently, the U.S. Department of Commerce announced a one-year suspension of its “50% penetration rule” issued on September 29, which originally required subsidiaries of Chinese companies with over 50% ownership to be subject to export controls, directly targeting Nexperia, which is wholly owned by the Chinese company Wingtech Technology.
The U.S. policy adjustment is backed by complex technological and geopolitical considerations.
It is noteworthy that before formally issuing the export control 50% ownership penetration rule, the U.S. had already discussed it with the Dutch government and may have even hinted that this rule would be used as a “concession” in the upcoming U.S.-China trade negotiations, meaning it would be suspended for a year.
This approach, while achieving the goal of exerting pressure, also exposes the instrumental nature of U.S. policy, providing an excuse for the Dutch government’s policy shift.
3. Supply Chain Impact and Economic Consequences Analysis
3.1 Nexperia’s Position in the Supply Chain: Irreplaceability and Vulnerability Coexist
Nexperia occupies a crucial position in the global automotive chip supply chain. According to TrendForce data, in the global automotive-grade power semiconductor market in 2024, Nexperia ranks among the top three with a 19.2% market share, with its automotive MOSFET products capturing 22.5% of the market share, a year-on-year increase of over 5 percentage points.
In the small signal diode and transistor sectors, it holds over 20% of the global share, is second in logic chips, and ranks first in ESD protection devices.
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Nexperia’s capacity layout shows a clear geographical dispersion. Wafer manufacturing is highly concentrated in Europe (two in the Netherlands, one in the UK, and one in Germany), accounting for about 90% of global capacity, while packaging and testing are mainly concentrated in Dongguan and Suzhou, China, accounting for 80% of global capacity.
This “European design + Chinese manufacturing” global collaboration model reflects the efficiency advantages of globalization but also exposes vulnerabilities under geopolitical risks.
Nexperia’s customer network spans the global automotive industry, with its products directly or indirectly supplying almost all mainstream automakers, including international brands like Volkswagen, BMW, and Mercedes-Benz, as well as Chinese automakers like Geely and BYD.
In the first half of 2025, the automotive business accounted for 60% of Nexperia’s revenue, with gross profits nearing 1 billion dollars.
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Such a highly concentrated customer structure means that any supply chain disruption could trigger a chain reaction.
3.2 Loss Assessment of European Automakers: From Short-term Production Halts to Long-term Supply Chain Restructuring
European automakers face losses that are multi-layered and multi-dimensional. In the short term, direct production losses have already become apparent. Volkswagen’s Wolfsburg plant has been forced to halt production due to chip supply interruptions, with daily losses of 12 million euros for models like the Golf and Tiguan, and total losses during the shutdown period expected to reach 180 million euros. Honda’s plant in Mexico has also reduced production or even halted production for a week due to shortages of Nexperia chips, incurring losses of 96 million dollars.
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In the medium term, the costs of supply chain restructuring will be even greater. The certification cycle for automotive-grade chips takes 6-12 months, and even if alternative suppliers are found, they cannot fill the gap in the short term. Nexperia occupies 15% of the global automotive-grade power device market, and no other company can instantly take over its capacity.
European automakers will need to re-certify suppliers, adjust production processes, and optimize inventory management, all of which require significant time and financial investment.
In the long term, the European automotive industry may face structural adjustment pressures. The Nexperia incident will accelerate the localization plans for automotive semiconductors in Europe, which may push for an integrated layout from wafer to packaging and testing, reducing reliance on Asian supply chains. However, this strategy faces significant challenges: on one hand, discrete devices have low profit margins and long investment return cycles, making it difficult to attract capital investment; on the other hand, Europe lacks an industrial foundation in low-cost packaging and testing, and establishing a complete industrial chain will take at least five years.
3.3 The Chain Reaction of China’s Export Controls: Precise Strikes and Market Differentiation
The export control measures by the Chinese Ministry of Commerce had an immediate effect but also brought complex chain reactions. The export control announcement on October 4 directly cut off Nexperia’s Chinese factory’s supply channels to Europe, with hundreds of millions of dollars worth of chips subsequently stranded in bonded areas.
In this situation, cutting off supplies is akin to self-harm—Nexperia’s headquarters in the Netherlands loses the ability to ship from Chinese production capacity, while the Chinese factory operates independently, ultimately leading to a fracture in Nexperia’s global supply chain.
The market differentiation effect of the export controls is particularly evident. Chinese companies began to actively avoid risks, and Nexperia China’s announcement of comprehensive RMB settlements was not only to evade interference from the U.S. dollar clearing system but also to test the waters for the internationalization of the RMB.
By using RMB for settlements, Nexperia China effectively established a business cycle independent of the Western financial system, which will have far-reaching implications for the global trade landscape.
More importantly, China’s export control measures demonstrated a high degree of selectivity and flexibility. On November 1, the Ministry of Commerce announced that it would grant exemptions for qualified export applications. This “conditional opening” strategy not only protects national interests but also avoids devastating impacts on the global supply chain. China’s goal is to apply precise strikes to force the Dutch government to reconsider its policy while providing European companies with an opportunity to “redeem themselves.”
3.4 The Business Model Transformation of Nexperia China’s Independent Operations: From Dependency to Autonomy
Nexperia China’s independent operations mark the birth of a new business model. The core characteristics of this model are “three independents”: legal independence, operational independence, and financial independence.
Legally, Nexperia China announced its independent operations based on China’s Company Law and Labor Contract Law, asserting the independent legal status of its subsidiary. The unilateral dismissal decision issued by Nexperia’s Dutch headquarters does not comply with the mandatory provisions of Nexperia China’s articles of association and relevant Chinese laws and regulations, and therefore has no legal effect within the jurisdiction of China.
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Operationally, Nexperia China established a fully autonomous production and management system. Employee salaries are paid domestically, IT systems are independently deployed, management software has been replaced with domestic solutions, and the supply chain system is connected with domestic companies like SMIC and Hua Hong Semiconductor.
This “de-Dutchification” operational model not only ensures continuity of production but also lays the foundation for future development.
Financially, the establishment of an RMB settlement system is revolutionary. All transactions must be settled in RMB, which not only avoids risks from the U.S. dollar clearing system but also reduces losses from exchange rate fluctuations. Nexperia China requires distributors and downstream customers to adopt RMB transactions comprehensively, completely avoiding the risk of financial sanctions that may arise from the dollar system.
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3.5 The Dilemma of Alternative Suppliers: Technically Feasible but Time Constraints
Theoretically, there are technical alternatives for Nexperia’s products. Manufacturers like ON Semiconductor, STMicroelectronics, and Infineon have capacity, but their production schedules are long, and their capacity structure leans towards mid-to-high-end power devices rather than the low-voltage discrete components that Nexperia specializes in. More critically, the certification cycle for automotive-grade chips becomes an insurmountable barrier.
Automotive-grade chips need to pass AEC-Q100 reliability certification, ISO 26262 functional safety certification, and IATF 16949 supply chain quality management system certification. Only after passing all these can they be called automotive-grade chips. Completing an AEC-Q100 automotive-grade durability test requires over 1,000 temperature cycles and simulating over ten years of usage conditions, with the entire certification process taking more than six months.
From engineering samples to passing AEC-Q100 certification, the average cycle is 18-24 months.This means that even if European automakers immediately start looking for alternative suppliers, it will take at least a year and a half to achieve bulk supply. During this time, the European automotive industry will face ongoing supply shortages and production interruptions.
System suppliers like Bosch rely on specific part numbers for functional safety certification. Once they change suppliers, they need to re-validate the entire circuit, which takes at least three months and up to six months. This certification barrier makes short-term supplier replacement nearly impossible and explains why European automakers are so deeply dependent on Nexperia.
4. In-Depth Analysis of Legal and Governance Aspects
4.1 The Legal Basis of the Dutch Goods Availability Act: A Modern Application of Cold War Heritage
The legal basis cited by the Dutch government is the Goods Availability Act, enacted on July 10, 1952, aimed at ensuring the availability of goods in wartime, war danger, or related special circumstances.
This law was established against the backdrop of geopolitical tensions during the early Cold War, with the legislative intent to “ensure the security of critical goods supply in times of war, armed conflict, or other national emergencies.”
The law ambiguously stipulates that its application must meet two core requirements: “the existence of a real and urgent risk of supply interruption” and “no other alternative regulatory means.” The Dutch government claims this is the first time the law has been invoked, arguing that “the continuity and security of critical technology knowledge and capabilities in the Netherlands and Europe are under threat.”
However, this interpretation has sparked widespread controversy in the legal community.
Critics argue that the Dutch government’s actions constitute an abuse of legal tools. This law was originally intended for wartime material control, but it is now being used to freeze the assets, intellectual property, and business adjustment rights of over 30 global entities of Nexperia for a full year, clearly exceeding the legislative intent of the law.
More importantly, the Dutch government did not provide sufficient evidence to prove the existence of a “real and urgent risk of supply interruption.”
4.2 Procedural Controversies in the Amsterdam Enterprise Court’s Ruling: Lack of Procedural Justice
The ruling process of the Amsterdam Enterprise Court exhibited significant procedural flaws. According to Articles 344 and subsequent provisions of Book 2 of the Dutch Civil Code, the enterprise court can initiate an investigation procedure when there are sufficient reasons to doubt the correctness of company policies. However, in the Nexperia case, the court directly and immediately implemented several emergency measures without a hearing, including suspending Zhang Xuezheng’s board position, appointing an independent director with decisive voting rights, and placing all shares of Nexperia (minus one share) in custody of designated personnel.
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This approach violates basic principles of procedural justice. When the court ruled to forcibly place Zhang Xuezheng’s shares in custody, it did not grant him the right to a hearing or temporary relief measures, violating Article 1 of the European Convention on Human Rights, which guarantees property rights, and Article 6, which guarantees the right to a fair trial. Even more questionable is that the Dutch Foreign Ministry had met with the U.S. State Department as early as June 2025, where the U.S. explicitly requested the “replacement of the Chinese CEO of Nexperia in exchange for an exemption from the entity list,” indicating that this external intervention clearly affected judicial independence.
4.3 The Fundamental Changes in Nexperia Semiconductor’s Internal Governance Structure: From Centralized Control to Decentralized Checks and Balances
Nexperia Semiconductor’s internal governance structure underwent fundamental changes following the Dutch government’s intervention. According to the ruling of the Amsterdam Enterprise Court on October 7, Nexperia Semiconductor’s governance structure now exhibits the following characteristics:
First, the CEO’s power has been undermined. Zhang Xuezheng has been suspended from all board positions, losing actual control over the company. The foreign independent director appointed by the court holds decisive voting rights, effectively controlling the company’s highest decision-making power.
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Second, the shareholding structure has been forcibly adjusted. Wingtech Technology retains 100% of the economic rights, but 99% of the voting rights have been entrusted to third-party custody, retaining only one share of voting rights.
This arrangement means that while Wingtech Technology remains the controlling shareholder, it has lost its voice in corporate governance.
Third, the management team has been restructured. The court appointed Stefan Tilger as interim CEO, and Chief Legal Officer Ruben Lichtenberg entered the core decision-making team.
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The new management team is primarily composed of foreigners, reflecting the Dutch government’s distrust of the Chinese management team.
4.4 The Legal Basis for Nexperia China’s Independent Operations: Reflection of Sovereignty Principles
Nexperia China’s announcement of independent operations has a solid legal basis. According to Article 11 of the Company Law of the People’s Republic of China, a company must formulate its articles of association in accordance with the law, which are binding on the company, shareholders, directors, supervisors, and senior management. Article 46 clearly defines the scope of the board’s powers, and any actions beyond its authority are invalid.
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Article 35 of the Labor Contract Law of the People’s Republic of China stipulates that an employer and employee may change the content of the labor contract by mutual agreement, and such changes must be in writing.
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The unilateral decision by the Dutch headquarters to dismiss Zhang Qiuming, Vice President of Sales and Marketing, was made without a resolution from Nexperia China’s board and without consultation with employees, clearly violating mandatory provisions of Chinese law.
Nexperia China explicitly stated in its legal declaration that, according to the Company Law of the People’s Republic of China and other relevant laws, the company has an independent legal personality, and no one may abuse their rights to harm the interests of the company and its shareholders. At all times, the domestic company is an independently operating and decision-making Chinese enterprise, and the legal representative has the authority to represent the company’s will and is ultimately responsible for all operational decisions.
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4.5 Legal Remedies for Wingtech Technology: The Possibility of International Arbitration
In the face of the Dutch government’s forced intervention, Wingtech Technology has various legal remedies available. First, it can appeal through domestic judicial procedures in the Netherlands. According to Dutch law, a party dissatisfied with the enterprise court’s ruling can appeal to a higher court for a retrial.
Second, it can invoke the China-Netherlands Bilateral Investment Treaty to initiate international investment arbitration against the Dutch government. If Wingtech Technology acts as the claimant in arbitration, it should qualify as a qualified investment and investor under Article 1 of the China-Netherlands Bilateral Investment Treaty.
It is noteworthy that, unlike China’s first-generation investment agreements, this BIT does not limit the scope of disputes that can be submitted to arbitration, allowing Wingtech Technology to submit its disputes with the Kingdom of the Netherlands to ICSID arbitration or to a specially established arbitration tribunal.
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Chinese Semiconductor Industry Association has issued a statement supporting Wingtech Technology in safeguarding its legitimate rights and interests through legal means. The statement pointed out that the Dutch government’s actions seriously violate international law and bilateral investment agreements, harming the legitimate rights and interests of Chinese enterprises.
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4.6 The Core of Legal Disputes: The Conflict of Sovereignty and Governance
The core of this legal dispute lies in the conflict between sovereignty and governance. From the Dutch perspective, based on the principle of territoriality, the Dutch government has the right to regulate enterprises located within its territory, especially when the actions of such enterprises may threaten national security. The Goods Availability Act grants the government emergency powers under special circumstances, and the Dutch government believes its actions are legally justified.
However, from China’s perspective, Nexperia China, as an independent legal entity registered in China, should be governed by Chinese law. The Dutch government’s intervention infringes upon China’s judicial sovereignty and violates the basic principles of international investment protection. Nexperia China’s refusal to comply with the Dutch government’s directives based on sovereignty principles is fully justified.
This conflict reflects the legal dilemmas of multinational corporate governance in the era of globalization. When a company’s operations span multiple jurisdictions, which country’s laws should apply? How to coordinate when laws from different countries conflict? Addressing these issues requires the international community to establish a more comprehensive legal framework and coordination mechanism.
5. Future Trends: Uncertainty Under Multiple Games
5.1 Conditions and Timeline for the Dutch Government’s Policy Shift: The Beginning of Limited Compromise
According to the latest reports from Bloomberg, the Dutch government is prepared to suspend a ministerial order that authorized it to block or modify decisions made by Nexperia Semiconductor after restoring exports of critical chips to China. If product shipments resume in the coming days and are confirmed, the Netherlands may suspend this order as early as next week.
This statement indicates that the Dutch government’s policy shift is conditional, with the core condition being the restoration of normal supply chain operations.
The time pressure faced by the Dutch government is intensifying. The daily losses from production stoppages in the European automotive industry are increasing, and major EU member states like Germany, France, and Italy have exerted tremendous pressure on the Dutch government. Germany, France, and Italy have even set a deadline of November 10, demanding that the Netherlands resolve the Nexperia issue by then.
Based on the current situation, the timeline for the Dutch government’s policy shift may follow the schedule below:
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Timeline |
Expected Action |
Key Conditions |
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By November 7 |
Restore Zhang Xuezheng’s CEO position |
Effectiveness of the China-Europe Coordination Memorandum |
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By November 13 |
Lift restrictions on Nexperia’s core assets |
Confirmation of chip supply restoration |
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Mid to late November |
Suspend or modify the ministerial order |
Stable operation of the supply chain |
However, this policy shift does not mean a complete surrender by the Dutch government; it is more likely a strategic retreat. The Dutch government may strengthen its oversight of Nexperia’s technology transfer and intellectual property while restoring normal operations, attempting to maintain its so-called “national security interests” without triggering a supply chain crisis.
5.2 Follow-up Measures by the Chinese Ministry of Commerce: Seeking Balance Between Principles and Flexibility
The Chinese Ministry of Commerce has demonstrated a high level of strategic determination and flexibility in handling the Nexperia issue. From the latest statements by the Ministry of Commerce spokesperson on November 6, it is clear that China’s position is firm: in a responsible manner towards the stability and security of the global semiconductor supply chain, it will promptly approve relevant export license applications from Chinese exporters and grant exemptions for qualified exports, striving to promote the resumption of supply from Nexperia (China).
China’s follow-up measures may include the following aspects:
First, continue to adhere to the principle of “conditional opening.” For European companies that comply with business rules and respect China’s sovereignty, China will continue to provide chip supplies; for those companies that cooperate with the Dutch government’s pressure on China, they may face ongoing supply restrictions.
Second, accelerate the construction of the RMB settlement system. The RMB settlement model of Nexperia China has become a successful example and may be promoted among more Chinese overseas enterprises in the future. This approach not only avoids risks from the dollar system but also helps promote the internationalization of the RMB.
Third, strengthen the security guarantee mechanism for the industrial chain. Through this incident, China has gained a deeper understanding of the importance of mastering key industrial chains. In the future, China may increase support for the semiconductor industry, especially in critical areas like automotive-grade chips and power semiconductors, striving for technological self-sufficiency.
5.3 Strategic Adjustments of Nexperia Semiconductor: From Global Integration to Regional Operations
Nexperia Semiconductor’s future strategic adjustments will be fundamental. This control struggle has completely changed the company’s operational model, shifting from global integrated operations to regional independent operations.
In terms of organizational structure, Nexperia Semiconductor may adopt a “one country, one policy” management model. The China region will continue to operate independently, establishing a fully autonomous management system; the European region may strengthen localized management under the oversight of the Dutch government; other regions may adopt flexible operational models based on local regulations and market demands.
In terms of supply chain layout, Nexperia Semiconductor may promote regionalization of the supply chain. The China region will strengthen cooperation with local suppliers to reduce reliance on European wafers; the European region may accelerate the construction of local packaging and testing capacity to decrease dependence on China. While this “de-globalization” trend may increase costs, it can enhance the security of the supply chain.
In terms of market strategy, Nexperia Semiconductor may adopt differentiated market strategies. The Chinese market will become the most important domestic market, prioritizing domestic demand; the European market may face stricter technical controls and export restrictions; other markets will adopt different strategies based on specific circumstances.
5.4 The Future of China-Europe Relations and Semiconductor Industry Cooperation: Moving Forward Amidst Twists and Turns
The Nexperia incident has had profound yet complex impacts on China-Europe relations and semiconductor industry cooperation. On one hand, this incident has exposed the divergences between China and Europe in terms of technology security and industrial policy, which may lead to a certain degree of regression in cooperation in high-tech fields.
On the other hand, this incident has also made both sides more deeply aware of the importance of mutual dependence. Europe needs China’s rare earth resources and manufacturing capabilities, while China needs Europe’s technology and market; this complementarity determines that the two sides cannot completely decouple. As emphasized by China on multiple occasions, both China and Europe occupy key positions in the global chip supply chain, and strengthening cooperation is in the interest of both parties.
Future China-Europe semiconductor industry cooperation may exhibit the following characteristics:
First, selective cooperation areas. The two sides may continue to deepen cooperation in non-sensitive areas, such as consumer electronics and industrial control; while in key areas involving national security, they may strengthen their respective capabilities.
Second, diversified cooperation models. In addition to traditional technology transfer and investment cooperation, both sides may explore new cooperation models, such as joint research and development, standard-setting, and talent training. These models can achieve mutual benefits while reducing concerns about technology security.
Third, institutionalized cooperation mechanisms. Both sides may establish more comprehensive communication and risk management mechanisms to avoid similar conflicts from occurring again. Such institutional arrangements will help enhance the stability and predictability of cooperation between the two sides.
5.5 Trends in Global Supply Chain Restructuring: From Efficiency Priority to Security Priority
The Nexperia incident marks a fundamental restructuring of the global supply chain. For decades, the construction of global supply chains has followed the principle of “efficiency priority,” achieving cost minimization and efficiency maximization through globalization. However, with the intensification of geopolitical risks, this principle is being replaced by “security priority.”
This restructuring trend is reflected in several aspects:
First, regionalization of supply chains. Companies are beginning to reassess the risks of global layouts, preferring to establish relatively independent supply chain systems in major markets. This trend of “nearshoring” and “friendshoring” will reshape the global industrial landscape.
Second, diversification of supply chains. Companies are no longer pursuing cost advantages from single sources but are reducing risks through supplier diversification. Even if this means increased costs, it can enhance the resilience of the supply chain.
Third, localization of supply chains. Governments are beginning to promote the localization of key industries through policy measures, especially in strategic areas such as semiconductors, new energy, and biomedicine. While this trend may reduce efficiency, it can enhance national industrial security.
The Nexperia incident serves as a wake-up call for global enterprises: in the era of globalization, there are no absolutely secure supply chains. Companies must find a new balance between efficiency and security, establishing more flexible, diverse, and resilient supply chain systems.
5.6 Warnings for Chinese Enterprises’ Overseas Investments: The Importance of Risk Prevention
The Nexperia incident provides profound lessons and warnings for Chinese enterprises’ overseas investments. First, geopolitical risks have become an important factor that cannot be ignored in overseas investments. Chinese enterprises must fully assess the political environment, policy stability, and relationship status with China when conducting overseas mergers and acquisitions.
Second, the importance of legal compliance is increasingly prominent. Chinese enterprises must have a deep understanding of the legal systems of the countries where they invest, especially regarding national security reviews and foreign investment merger regulations. At the same time, they should establish a sound compliance system to ensure that their operations comply with local legal requirements.
Third, the importance of cultural integration and localized management cannot be ignored. In the Nexperia incident, cultural differences and conflicts in management philosophies were also significant reasons for the escalation of conflicts. Chinese enterprises must respect local cultures and establish effective cross-cultural management mechanisms when operating overseas.
Finally, strategic considerations for supply chain security must be prioritized. When making overseas investments, Chinese enterprises should not only consider the commercial value of the investment target but also assess its position and potential risks in the global supply chain. Especially for investments in critical industrial chains, comprehensive risk contingency plans must be prepared.
Conclusion
The dramatic shift in the Dutch government’s policy towards Nexperia Semiconductor is not only a struggle for control of a multinational enterprise but also a microcosm of the conflicts between geopolitical games and business rules in the era of globalization. This month-long contest has temporarily concluded with a strategic compromise from the Dutch government, but the deep reflections it has triggered are far from over.
On the surface, the Dutch government’s policy shift appears to be a capitulation to the pressures of the European automotive industry and a passive response to changes in U.S. policy. However, a deeper analysis reveals that this shift reflects that in an interdependent global system, any unilateral coercive measures are unsustainable. Although Nexperia is a company, it is connected to the nerve endings of the entire global automotive supply chain. The Dutch government’s attempt to change business rules through administrative means ultimately led to an embarrassing situation of shooting itself in the foot.
China’s display of strategic determination and responsive wisdom in this game is commendable. Through precise countermeasures and flexible diplomatic strategies, China not only safeguarded the legitimate rights and interests of its enterprises but also showcased the image of a responsible major power to the world. Particularly, the successful independent operation model of Nexperia China provides new ideas and pathways for Chinese enterprises operating overseas.
However, we must also be clear that this victory is temporary and conditional. The complexity of geopolitical factors means that similar conflicts may arise again in different forms. Chinese enterprises must establish more robust risk prevention mechanisms when investing and operating overseas, fully considering political, legal, and cultural risks while pursuing commercial interests.
From a broader perspective, the Nexperia incident signals that the global supply chain is undergoing profound structural changes. In the context of rising technological nationalism and increasing geopolitical risks, the past model of globalization based on efficiency priority is being challenged.How to find a new balance between efficiency and security, and how to build a more just and reasonable global economic order are significant issues facing the international community..
The story of Nexperia Semiconductor continues. Regardless of the final outcome, this struggle for control of a multinational enterprise will be recorded as a classic case in global business history and international relations history. It tells us that in this interconnected yet divided world, only through dialogue and cooperation can we achieve true win-win outcomes. Any attempt to change the rules of the game through coercive means will ultimately come at a heavy price.
Looking to the future, we have reason to believe that as all parties gradually recognize the importance of interdependence, conflicts like that of Nexperia Semiconductor will decrease. However, we must also remain vigilant, as in this uncertain era, new challenges and conflicts may arise at any time. Only by establishing a more just, reasonable, and inclusive global governance system can we create a better environment for the common development of humanity. The greatest significance of the Nexperia Semiconductor incident may lie in this.