Nexperia seizure triggers global auto supply chain alarm

by LU Keyan

A Dutch government freeze on Nexperia has disrupted supplies to global automakers including Volkswagen, BMW and Mercedes-Benz, raising fears of broader supply chain turmoil after its Chinese parent Wingtech Technology (600745.SH) effectively lost control of the firm.

The Netherlands invoked the Goods Provision Act on Sept. 30 to suspend Nexperia's management rights, remove CEO ZHANG Xuezheng, and appoint an external director with decisive voting power, effectively stripping Wingtech of control — a rare step in cross-border corporate oversight that raised concerns about government intervention in corporate affairs.

Nexperia, based in Nijmegen, was formerly the semiconductor arm of Royal Philips and later part of NXP Semiconductors. Wingtech acquired 79.98% of the company in 2019 for 26.85 billion yuan (about US$3.9 billion at the time) and later took full control — the first full acquisition of a major global chipmaker by a Chinese company.

The freeze order has disrupted shipments from Nexperia's Dongguan plant, the National Business Daily reported. The European Automobile Manufacturers' Association (ACEA) said it was "deeply concerned" about the disruption, which it warned had put the industry in an "alarming situation." Volkswagen said its chip stock could last only about three weeks, while BMW and Mercedes have faced slowdowns in electric vehicle lines.

Dutch Economic Affairs Minister Vincent Karremans said the decision was intended to prevent asset transfers abroad and protect Europe's chip supply chain. He denied any link to U.S. sanctions, though the timing drew scrutiny as it coincided with new U.S. export rules extending restrictions to subsidiaries of Chinese firms on the U.S. Entity List — adding to speculation of coordinated action.

The process — from the Sept. 30 freeze order to the Oct. 7 replacement of the CEO and transfer of equity control — was completed in just seven days, far shorter than the roughly three months such cases usually take in Europe, raising questions over whether the proceedings were fast-tracked under government pressure.

Nexperia's production model spans Europe and Asia, with wafers made in Hamburg and packaging and testing carried out mainly in China. A Wingtech insider said the company's "China for China" localization — producing in China to serve the local market — followed requests from European clients, and the plan was approved by its German COO Achim Kempe and other senior European executives.

Under Wingtech's control, Nexperia's revenue grew rapidly from around €1 billion in 2018 to €2.36 billion in 2022, with its gross margin rising from 25% to 42.4% and its share of the global automotive power chip market exceeding 30%.

On Oct. 21, Chinese Commerce Minister WANG Wentao urged his Dutch counterpart Karremans to resolve the issue in line with market and legal principles and protect Chinese investors' rights. Karremans said the Netherlands values economic ties with China and would stay in contact to seek a constructive solution.