Chip Wars: The Grand Modern History of the Netherlands
——With rare earth supply cuts, U.S. pressure, and internal EU conflicts, how can a small country break through the cracks between China and the U.S.?
1. Historical Echoes: From Maritime Hegemony to Chip Prisoners
In the 17th century, the Netherlands established the first modern financial system in human history, leveraging the world’s most powerful merchant fleet and the East India Company. The birth of the Amsterdam Stock Exchange made this low-lying country a hub for global trade. However, when Britain blocked Dutch merchant ships through the Navigation Acts, this maritime empire quickly declined. Historian Fernand Braudel pointed out: “The tragedy of the Netherlands lies in its acquisition of political influence through commercial means, yet it has always lacked the military power to match it.”
Three hundred years later, the Netherlands finds itself in a similar predicament. ASML’s lithography machines hold 90% of the global market share for high-end chip manufacturing equipment, but 90% of the rare earth materials in its core technology rely on China’s purification technology. In 2025, the U.S. mandated through the CHIPS Act that the Netherlands cut off technology supplies to China, resulting in a market value evaporation of over 30 billion euros for ASML. This contradiction of “technological hegemony” and “material dependence” mirrors the historical reliance of the Netherlands on spice trade without an industrial foundation.
2. Economic Fractures: The “Dutch Disease” of the Semiconductor Industry
(1) The Fatal Wound of Technological Dependence
The Dutch economy is highly dependent on the semiconductor industry, with 15% of its GDP directly or indirectly coming from this sector. Each EUV lithography machine from ASML costs 120 million euros, but each requires rare earth magnets worth about 5 million euros provided by China. In 2025, due to Dutch restrictions on DUV lithography machine exports, China implemented quota management on rare earth exports, leading to a 30% increase in ASML’s production costs.
This dependence is also significant in the agricultural sector. The Netherlands is the second-largest agricultural exporter globally, with 40% of its milk powder and flowers exported to China. In the first four months of 2025, the trade deficit between China and the Netherlands reached 30.9 billion dollars, with a growth rate of 14.85%. After U.S. pressure led the Netherlands to freeze the assets of Nexperia, the European automotive supply chain was disrupted, further exposing the fragility of the Dutch economic structure.
(2) The “Hollowing Out” of the Financial System
The Dutch financial sector is highly reliant on international capital flows. In 2025, ING Bank’s profits from its Asian operations fell by 21% due to U.S.-China trade frictions. This financial vulnerability was evident as early as the 17th century: when Britain blocked Dutch merchant ships through the Navigation Acts, stock prices on the Amsterdam Stock Exchange plummeted by 40%.
3. Diplomatic Predicament: From “Player” to “Pawns”
(1) The “Choosing Sides” Under U.S. Pressure
In 2025, the U.S. mandated through the CHIPS Act that the Netherlands cut off technology supplies to China and threatened sanctions against ASML. The Dutch government was forced to freeze Nexperia’s assets, leading to a deterioration in Sino-Dutch trade relations. This dilemma of “choosing sides” has left the Netherlands caught between technological autonomy and market interests.
(2) The “Island Effect” Within the EU
The Netherlands’ diplomatic position within the EU is becoming increasingly isolated. In September 2025, after the Netherlands froze Nexperia’s assets through the Supply of Materials Act, major allies like Germany and France publicly expressed opposition. This isolation has historical precedents: in the 17th century, when the Netherlands competed with Britain and France for maritime hegemony, excessive expansion led to the alienation of allies.
4. Path to Resolution: The Survival Wisdom of Small Nations
(1) The “Dual-Track” of Technological Autonomy
The Netherlands needs to increase investment in rare earth substitution technologies. By 2025, Delft University of Technology has successfully developed rare earth magnet purification technology, but mass production will still take 3-5 years. In the short term, the Netherlands can establish joint supply chains with resource-rich countries like Australia and Canada to reduce dependence on China.
(2) The “South-South Cooperation” of Market Diversification
The Netherlands can accelerate the exploration of emerging markets in Southeast Asia and Latin America. In 2025, Dutch agricultural exports to Vietnam and Brazil increased by 18% and 23%, respectively, but semiconductor equipment exports remain restricted by the U.S. The Netherlands needs to expand exports in “non-sensitive technologies” through multilateral negotiations.
(3) The “New Paradigm” of Diplomatic Balancing
The Netherlands can emulate the pragmatic diplomacy of the 1964 Rens visit to the Soviet Union by establishing a “buffer zone” between China and the U.S. By 2025, the Dutch Ministry of Economic Affairs has secretly consulted with China, attempting to establish a technology-sharing mechanism in the semiconductor field. This strategy must be based on three foundations: maintaining technological neutrality, avoiding public alignment, and strengthening multilateral cooperation.
5. Historical Reflection: The Survival Path of Small Nations
In the 17th century, the Netherlands rebuilt its economic influence through the Benelux Customs Union; after World War II, the three countries resisted crises through a monetary union. Today’s Netherlands may need to learn to find a new balance in cooperation. After all, history has proven that for small nations to maintain influence, they must precisely balance strategic goals with matching strength.
The predicament of the Netherlands is essentially a consequence of the “weaponization of rules.” When the U.S. politicizes chip technology and China strategizes rare earth supply, the Netherlands, as a small nation highly dependent on global trade, is destined to become a victim of geopolitical conflicts. Only by adhering to win-win cooperation can it maintain its global leadership in the semiconductor industry.
Conclusion: The Radiance of Small Nations
The lament of the Netherlands is not an isolated event but a typical dilemma faced by small nations in the great power game. From 17th-century maritime hegemony to 21st-century chip prisoners, the fate of the Netherlands has always oscillated between “dependence” and “independence.” History may have provided the answer: the survival path of small nations lies not in becoming a vassal of a great power but in constructing their own strategic space.
“In the grand chip wars, the Netherlands is both a victim and a witness. Its path to breakthrough may provide a survival guide for all small nations.”
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As human civilization rises and falls, in the night river with a slanted moon, two or three stars are the fire of Guazhou.
The most exhilarating aspect of contemporary human civilization is the chip war. We will continue to report in-depth.
Further Reading: The Netherlands is dumbfounded: Zhuge Liang’s brilliant strategy to stabilize the world, losing both the wife and the soldiers?
The Netherlands, losing both the wife and the soldiers?
Original publication by Dong Shuo Xi Shuo
Only thoughts shine forever