Semiconductor Crisis Escalates as China Retaliates Against Dutch Intervention
In a dramatic escalation of the global semiconductor trade war, China has imposed an export ban on Dutch chipmaker Nexperia following unprecedented intervention by the Netherlands government. The Chinese government announced on October 4, 2025, that Nexperia's Chinese subsidiary can no longer export its products internationally, affecting approximately 50 billion chips annually that are crucial for smartphones, automobiles, and solar panels worldwide.
Dutch Government Takes Control Using Emergency Powers
The Netherlands invoked the rarely-used Goods Availability Act of 1952 on September 30, 2025, to take control of Nexperia's operations. This Cold War-era legislation, which had never been used before in the high-tech sector, allows the government to intervene in companies to ensure the availability of critical goods during emergencies. 'We had to act to prevent the unavailability of these crucial chips during potential crisis situations,' said demissionary Minister of Economic Affairs, explaining the extraordinary measure.
The intervention came after the Dutch government identified 'serious governance shortcomings' and concerns about potential technology leakage to China. The Enterprise Chamber of the Amsterdam Court of Appeal suspended Nexperia's CEO Zhang Xuezheng, citing 'valid reasons to doubt sound management' following revelations of questionable financial practices.
Corporate Governance Concerns Trigger Action
Court documents revealed that Zhang Xuezheng had authorized a multi-million dollar purchase from Chinese company WSS, where he held personal interests, despite the order being unnecessary according to the court. Additionally, he revoked banking powers from experienced financial executives and transferred them to individuals without financial experience, including someone who wasn't even employed by Nexperia at the time.
Nexperia, which was acquired by Chinese company Wingtech Technology in 2018 for $3.6 billion, had been raising concerns with the Dutch Ministry of Economic Affairs since 2023 about the influence of its sole shareholder. Wingtech maintains strong ties with the Chinese state through the State-owned Assets Supervision and Administration Commission.
Geopolitical Tensions and US Pressure
The situation reflects broader geopolitical tensions in the semiconductor industry. China has accused the Netherlands of acting under pressure from the United States, though Dutch officials deny this. However, court documents show that on September 30, the same day the Dutch government intervened, the US imposed trade restrictions on Nexperia.
'This is an extraordinarily disgraceful violation of international rules and market principles,' a Chinese semiconductor industry representative stated, condemning the Dutch actions. The European Commission has expressed support for the Netherlands' move to protect European economic security.
Industry Impact and Ongoing Negotiations
Nexperia, headquartered in Nijmegen with 12,500 employees worldwide, produces essential chips for the European automotive industry and consumer electronics. The company is now in active negotiations with Chinese authorities to obtain exemptions from the export ban. 'We are in close consultation with Chinese government agencies to limit the impact of this measure,' the company stated on its website.
The Dutch government's intervention order remains in effect for up to one year, while the duration of China's export restrictions remains uncertain. This confrontation represents one of the most significant trade disputes between China and a European nation in recent years, highlighting the strategic importance of semiconductor manufacturing in global economic competition.