When the Dutch government announced an expansion of export restrictions on Nexperia Semiconductor under the guise of “national security,” it perhaps did not anticipate that China’s countermeasures would come so swiftly and precisely—without loud protests, lengthy legal battles, but with a heavy blow of “cutting off key raw material supplies,” leaving the Dutch semiconductor industry in a passive position. The cleverness of this countermeasure lies in China’s grasp of the “lifeline” of the global semiconductor supply chain, using the resources that the Netherlands relies on the most, sending a direct warning: those who seize the fruits of others will ultimately be bitten by their own greed.

1. The Netherlands’ Aggressive Calculations: Wanting Both the Chinese Market and Technological Supremacy

The Netherlands’ blockade of Nexperia Semiconductor is essentially a greedy game of wanting it all. On one hand, the Netherlands is well aware of the value of Nexperia Semiconductor in the Chinese market—being a global leader in discrete devices, Nexperia’s products are widely used in China’s automotive, home appliance, and 5G base station sectors, with annual exports to China exceeding 2 billion euros; on the other hand, under pressure from the United States, the Netherlands is attempting to “decouple” its technology and production capacity from the Chinese industrial chain, even considering the possibility of forcibly divesting Nexperia to European companies in the future.

This logic of wanting to have it both ways has already been reflected in the Netherlands’ attitude towards ASML’s lithography machines: wanting to profit immensely from exporting DUV lithography machines to China (with ASML’s sales to China accounting for 26% in 2023), while cooperating with the U.S. to restrict EUV lithography machines, attempting to curb China’s breakthroughs in high-end chips. However, this time, the Netherlands miscalculated—China’s countermeasures in the semiconductor field have already shifted from “passive defense” to “precision strikes.”

2. Precision Strikes at the Core of the Dutch Semiconductor Supply Chain

1. Upgrade of Rare Earth Export Controls

The Chinese Ministry of Commerce announced export restrictions on technologies, equipment, and items related to rare earths, directly threatening the supply chain of Dutch semiconductor giant ASML. Rare earths are core materials for manufacturing lithography machines and semiconductor materials (such as phosphors and magnetic materials), with China controlling 90% of the global rare earth refining capacity. This move not only forces the Netherlands to reassess its export issues regarding lithography machines to China but also puts Nexperia Semiconductor’s upstream suppliers at risk of supply disruptions.

2. Prohibition of Nexperia Semiconductor’s Export of Components Manufactured in China

The Chinese Ministry of Commerce issued a ban prohibiting Nexperia Semiconductor and its subcontractors from exporting certain finished components (such as automotive-grade power devices) manufactured in China. Since over 70% of Nexperia Semiconductor’s global packaging and testing capacity relies on its factory in Dongguan, this measure directly cuts off its ability to supply European automotive manufacturers (such as BMW and Volkswagen), leading to a risk of paralysis in the European automotive supply chain.

Upon hearing the news, the Dutch semiconductor industry was thrown into chaos. Although Nexperia Semiconductor’s parent company, Wingtech Technology, is a Chinese enterprise, its factories in Europe still need to procure some raw materials from the Netherlands; ASML urgently assessed the impact of gallium and germanium shortages on its advanced process lithography machines; the Dutch Ministry of Economic Affairs held an emergency meeting, attempting to persuade the EU to pressure China, only to find that China had already completed the export control procedures in accordance with WTO rules, legally and compliantly, without any grounds for criticism.

3. The ‘Dumbfounded’ Reaction: The Netherlands Finally Understands China’s ‘Supply Chain Wisdom’

The Netherlands’ astonishment stems from a misjudgment of China’s semiconductor industry upgrade. Over the past decade, China has not only broken through blockades in large chips (such as those below 7nm processes) but has also built a global advantage in niche areas (such as discrete devices and rare metals). The rise of Nexperia Semiconductor is a result of China’s efforts to strengthen its supply chain; the export controls on gallium and germanium represent China’s classic tactic of “using chains to control chains”—not competing with you at the application level, but directly cutting off the lifeline at the foundational level.

What surprised the Netherlands even more was that China’s countermeasures did not trigger panic in the global market; instead, they reinforced the perception that “China’s supply chain is irreplaceable.” An internal report from the European Semiconductor Industry Association (ESIA) pointed out: “If Europe loses the supply of gallium and germanium from China, the European semiconductor industry will face at least 18 months of capacity decline and a cost increase of over 30%.” Meanwhile, in China, the domestic demand for related rare metals has been rapidly filled— as the domestic semiconductor supply chain matures, the downstream applications of gallium and germanium (such as third-generation semiconductors and photovoltaics) are absorbing the excess capacity, making the impact of the countermeasures on China negligible.

Conclusion: The Cost of Aggression is Learning to Respect the Rules

The farce of the Netherlands’ aggressive move against Nexperia Semiconductor ultimately concludes with China’s “precision countermeasures.” This is not a simple “an eye for an eye,” but a manifestation of China’s semiconductor industry transitioning from “following” to “leading”—when we build barriers in “invisible fields” such as rare metals and discrete devices, and when our supply chain resilience is sufficient to cope with external blockades, any act of “aggression” will turn into a foolish game of “wounding a thousand while losing eight hundred ourselves.”

China’s countermeasure has left the Netherlands dumbfounded and has made the world see clearly: technological competition is not a zero-sum game, nor is it a stage for the logic of banditry. Respecting market rules and abandoning technological supremacy is the only way for the global semiconductor industry to achieve win-win outcomes. Otherwise, the next to be “precision struck” may be more aggressors attempting to overstep their bounds.