Background of the Situation
In a significant development that could impact China’s relations with the European Union, Chinese technology company Wingtech announced that control of its Dutch subsidiary Nexperia has been effectively frozen. This follows an intervention by a government ministry and court in the Netherlands.
Wingtech submitted a corporate filing dated October 13 to the Shanghai Stock Exchange on Sunday. The filing revealed that semiconductor manufacturer Nexperia is now under temporary external management after an order from the Dutch Ministry of Economic Affairs. In a WeChat post that was later deleted, Wingtech criticized the Dutch move and disputed the claim that it was taken for reasons of “national security”.
Dutch Government’s Statement
On Sunday evening, the Dutch government issued a statement confirming that it had “invoked the Goods Availability Act due to serious governance shortcomings at semiconductor manufacturer Nexperia”. The decision was made “to prevent a situation in which the goods produced by Nexperia (finished and semi-finished products) would become unavailable in an emergency”.
The statement mentioned that the ministry observed “recent and acute signals of serious governance shortcomings and actions” within Nexperia. These signals were said to pose a threat to the continuity and safeguarding on Dutch and European soil of crucial technological knowledge and capabilities. The automotive sector was highlighted as particularly vulnerable.
Although the statement did not explicitly explain why the company’s operations were considered risky, a Dutch newspaper cited government sources who reported that the move was “intended to prevent intellectual property related to chips from disappearing abroad”.
Legal Actions Taken
According to Wingtech’s corporate filing, on October 1, Nexperia Semiconductor Holding and its Dutch chief legal officer, Ruben Lichtenberg, supported by chief financial officer Stefan Tilger and chief operating officer Achim Kempe, petitioned the Amsterdam Enterprise Court for an investigation and provisional measures.
On the same day, the Amsterdam Enterprise Court issued emergency interim rulings, which included suspending Wingtech chairman Zhang Xuezheng from his roles as executive director of Nexperia Holdings and non-executive director of Nexperia. It also placed shares held by Wingtech’s Hong Kong subsidiary, Yucheng Holdings Ltd, under third-party management.
On October 7, following a second hearing, the court extended the suspension of Zhang’s positions and appointed an independent foreign national as non-executive director with decisive voting rights.
In its filing, Wingtech stated that Yucheng Holdings temporarily loses governance and voting rights over its 99 Nexperia shares, though its economic rights remain intact. The company added that Nexperia’s daily operations continue and that the impact of the measures is not yet quantifiable.
Impact on Sino-Dutch Relations
This move will add further tension to Sino-Dutch relations, which have been strained for years by restrictions on Dutch company ASML’s exports of high-end lithography machines to Chinese buyers. This followed pressure campaigns from Washington to curb the shipments.
Wingtech was added to the US Entity List in December 2024, meaning American companies are prohibited from exporting or transferring US-origin goods, software or technology to Wingtech or its subsidiaries without a special licence.
In an emailed statement, Nexperia told the South China Morning Post: “We have no further comments. Nexperia complies with all existing laws and regulations, export controls and sanctions regimes. For the same purposes, we remain in regular contact with relevant authorities.”
Wingtech’s Response
“The Dutch government’s decision to freeze Nexperia’s global operations under the pretext of ‘national security’ constitutes excessive intervention driven by geopolitical bias, rather than a fact-based risk assessment,” read the deleted WeChat post, which was archived, translated and distributed in a post by the Chinese policy blog Pekingnology.
“This action seriously contravenes the European Union’s long-standing commitment to market economy principles, fair competition, and international trade norms. We express our strong protest against such discriminatory treatment targeting Chinese-funded enterprises,” the post continued.
It said that since its acquisition of Nexperia in 2019, Wingtech “has strictly abided by the laws and regulations of all jurisdictions where it operates, maintaining transparent operations and sound governance”, and employs “thousands of local staff” through R&D and manufacturing sites in the Netherlands, Germany and Britain.
“Certain foreign executives within Nexperia have attempted to use legal means to forcibly alter the company’s ownership structure,” read the deleted WeChat post, which added that these actions “closely aligned with the Dutch government’s administrative directives and, in essence, represent an effort to usurp shareholder rights and subvert lawful corporate governance under the guise of ‘compliance’.”