Nexperia Crisis Explained: Global Auto Production at Risk

When the Dutch government seized control of Nexperia on September 30, 2025, it didn’t just intervene in a corporate dispute. It exposed how fragile Europe’s technological independence has become.

Within days, automakers from the EU, US, and Japan were warning of production stoppages. China retaliated with export bans, and Washington quietly marked another success in its campaign to isolate Chinese owned technology.

The Nexperia crisis isn’t just a headline. It’s a real time case study in how one semiconductor manufacturer became the fault line between globalization and national security.

Executive Summary: The Nexperia Crisis at a Glance

Why It Matters

• 12,400 employees across Europe, Asia, and the United States

• $2.06 billion annual revenue (2024); approximately 48% of revenue generated in China

• 110 billion semiconductors shipped yearly

• 40% global market share in discrete transistors and diodes

• 80% of end-product capacity processed in mainland China

A single export rule exposed how Europe's industrial engine depends on China's back-end capacity

1. The Low-Tech Paradox: Why Nexperia Matters

In the current world obsessed with AI processors, Nexperia produces what engineers call “legacy semiconductors”. Mature, highly reliable devices such as discrete transistors, diodes, and MOSFETs.

They’re the plumbing of electronics: small, cheap, and indispensable.

In the automotive industry, they are present in all applications and absolutely critical to automotive supply chains, from OEMs to Tier 1 suppliers.

ADAS systems (LiDARs, radars), HVAC, lighting, in vehicle networks, airbags, ABS, ESP, cooling fans, fuel injection, fluid pumps, 48V battery management systems, inverters, onboard chargers, and DC-DC converters all depend on them.

2. From Philips to Wingtech: The Rise of Nexperia

Nexperia's roots go back a century. In the 1920s, Philips acquired two legendary companies: Mullard (London) and Valvo (Hamburg).

That legacy became NXP Semiconductors NV, spun off in 2006.

In 2017, NXP sold its Standard Products division to Chinese investors (JAC Capital and Wise Road Capital) for $2.75 billion, creating Nexperia BV.

Two years later, in December 2019, Wingtech Technology, a Chinese electronics ODM for Xiaomi and Huawei, completed the acquisition and acquired a 79.98% stake, reported to cost around $3.6 billion.

Three months later, Frans Scheper stepped down as CEO of Nexperia. Chairman Zhang Xuezheng, co-founder and CEO of Wingtech Technology, took the helm.

About 30% of Wingtech’s shares are reported to be held by state linked funds, a detail that would later become critical.

3. Newport Wafer Fab: Where the Tech War Quietly Began

In 2021, Nexperia bought Newport Wafer Fab for £63 million (approximately $83 million) to expand into compound semiconductors.

Washington immediately pushed London to reexamine the deal.

By late 2022, the UK government invoked the National Security and Investment Act to block it and ordered Nexperia to divest 86%.

In 2023, under combined US and UK pressure, Nexperia sold Newport to Vishay Intertechnology (US) for $177 million.

This became the first Western precedent for forced divestment of a Chinese owned semiconductor asset, a preview of what was coming for the Netherlands.

4. Wingtech’s Forced Retreat Under US Pressure

Wingtech was the world's third-largest smartphone original design manufacturer in 2023, accounting for 20.6 per cent of the total outsourced handset volume and it had worked with Apple, Xiaomi, Samsung and Huawei and in parallel it was dominating the field of semiconductors through Nexperia.

In December 2024, the US Commerce Department added Wingtech to its Entity List, restricting technology exports.

Facing sanctions and market pressure, Wingtech announced in March 2025 the sale of its nine subsidiaries, all part of its consumer electronics division, to Luxshare Precision for $635 million.

This move left Nexperia as Wingtech’s only major global asset, and the next likely target of US policy.

5. The Tightest U.S. Sanction Wave Hits Wingtech

By June 2025, American officials privately warned The Hague that Nexperia CEO Zhang Xuezheng would “almost certainly have to be replaced” to avoid upcoming sanctions.

Three months later, on September 29, 2025, the US Bureau of Industry and Security implemented its “50% Ownership Rule,” automatically extending export controls to subsidiaries majority owned by blacklisted entities.

Because Wingtech owned Nexperia outright, the Dutch company was instantly captured.

For the Netherlands, it was a no-win scenario: either defy Washington and risk supply disruptions or act against a Chinese-owned firm on its own soil.

6. Netherlands’ First Major Intervention in Tech War

On September 30, 2025, Dutch Minister of Economic Affairs Vincent Karremans invoked the Goods Availability Act (Wet beschikbaarheid goederen), a Cold War–era law designed to protect critical industries.

Investigations revealed that CEO Zhang had forced Nexperia to place $200 million in wafer orders with his private company WingSkySemi, a chip manufacturer in Shanghai, nearly triple what was actually needed. The goal was to keep WingSkySemi afloat amid its own financial difficulties, and there were concerns that Nexperia’s intellectual property was being transferred to China.

On October 7, the Amsterdam Court of Appeal suspended Zhang and handed control to an independent administrator.

Karremans insisted the move was made “without pressure from any other country,” but few in Brussels or Beijing believed that claim.

7. China’s Retaliation Threatens Global Auto Production

Beijing responded on October 4, 2025, with an export-control order banning Nexperia China Ltd. from shipping finished components without approval.

The decision instantly froze about 80% of Nexperia’s production, most of it handled in Dongguan.

Wingtech denounced the seizure as “excessive interference driven by geopolitical bias.”

Shares in Shanghai plunged 10%. Chinese media branded the move “robbery in legal disguise.”

Europe had seized a Chinese-owned firm; China had seized Europe’s supply chain.

8. The Ten Days That Shook the Automotive Supply Chain

Ten days. Three governments. One crisis.

9. Automotive OEMs Face The First Wave of Disruption

The force majeure letter set off alarms across the industry.

Volkswagen warned of stoppages in Golf and Tiguan production by October 29, 2025. BMW reported supplier delays, and Volvo Cars (owned by Geely) said it had adequate inventory but predicted that other factories would face shutdowns.

To understand the scale of the risk, Volkswagen was expected to manufacture 250,000 Golf units this year, already down from 300,000 last year. Considering 1,000 cars per working day, the company could lose €28 million in potential daily revenue.

Force majeure has been declared, but the resolution of this crisis will ultimately be determined at the political level, not by market mechanisms.

Tier 1 suppliers like Bosch, Continental, DENSO, and KOSTAL have remained publicly quiet but face immense pressure. They are likely the first to be affected as they struggle to deliver complete assemblies to automakers.

Inventories are usually kept for only a few weeks, and requalification of alternatives from suppliers like Infineon could take months. Automotive standards (AEC-Q100/Q101) make switching suppliers a months long process, so any disruption ripples instantly through global manufacturing.

10. When Economic Security Outweigh Market Freedom

By reviving a Cold War law to seize a foreign-owned firm, the Netherlands signaled that economic security and local interests now trump free-market orthodoxy.

Much like the US ban on Huawei in 2019, the Nexperia seizure marked Europe’s own “Huawei Moment,” a turning point when economic security began to outweigh market liberalism.

11. From Efficiency to National Security Policy

The Nexperia episode exposed the fragility of decades of just-in-time manufacturing.

Wafer fabrication in Europe and packaging in China worked perfectly, until geopolitics intervened.

Now governments are restructuring global supply chains with resilience in mind, not just cost:

• US CHIPS Act (2022): $52 billion for domestic semiconductor manufacturing

• EU Chips Act (2022): €43 billion to reduce dependency

Semiconductor strategy is no longer just economics. It’s national security policy.

12. The Chip That Gave A Reality Check of Dependence

The Nexperia crisis is the moment where business, governance, and geopolitics collided.

A company once celebrated for efficiency became the first casualty of Europe’s semiconductor realignment.

It proved that a component worth a few cents can decide whether a billion euro factory keeps running and which superpower holds the switch.

For Europe, the lesson is clear: sovereignty in the semiconductor age isn’t just measured in nanometers or AI breakthroughs—it’s measured in control.

Control over the factories that package, the boards that govern, and the alliances that decide who supplies whom when the next disruption hits.

The ten days between September 29 and October 10, 2025, may go down as the moment globalization gave way to securitization, when Europe realized that dependence, even on the smallest transistor, carries a geopolitical price.

As the world moves toward electrification, such disruptions could have even more severe consequences. Every EV uses roughly 1,300 chips compared with 600 in an internal combustion car.

13. My Take: What This Crisis Signals For The Years Ahead

There are multiple developments happening, and with my limited knowledge, I would share these three points for the upcoming three to five years on how these new developments could effect, Chinese OEMs plans to scale in Europe.

EU consumer sentiment:
For the first time, I’ve noticed a shift within emobility circles. Everyone acknowledges that Chinese EVs offer the best value for money, but recent events, including the joint military parade involving China, Russia, and North Korea, have sparked concerns among very few about indirectly supporting a regime perceived as opposing EU interests. The Nexperia case, combined with export bans and near production halts at EU OEMs, may push some buyers in the coming years to reconsider their purchasing decisions in the coming years.

Policy front:
The Nexperia episode exposed how fragile Europe’s automotive supply chain is. If policymakers see this as a strategic risk, we might witness a stronger push toward tech nationalism, with Chinese OEMs facing new hurdles when trying to establish factories in Europe.

Trust from the Chinese side:
The possibility of being cornered and having operations seized overnight introduces deep uncertainty. Chinese companies may grow more cautious about expanding in Europe, fearing they could be cornered again, which could mean selling fewer cars, especially with tariffs already being imposed.

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