A new chapter in the global tech race has thrown the automotive world into uncertainty. Nexperia, a semiconductor company with European roots and Chinese ownership, has become the latest flashpoint in the growing power struggle between China, Europe, and the United States — a clash now rippling through car factories around the world.
From Philips Legacy to Global Influence
Nexperia’s origins reach back to the early 1900s, when Mullard in London and Valvo in Hamburg were at the forefront of Europe’s electronic revolution. Both were eventually acquired by Philips, whose research in the 1950s and 1960s laid the foundation for the modern semiconductor industry. Philips’ development of the SOT23 component package in 1969 became a key innovation in surface-mount electronics.
Over the following decades, Philips expanded production to Asia, opening new plants in the Philippines, Malaysia, and China to meet growing demand. In 2006, Philips spun off its semiconductor division into NXP Semiconductors, which later gave birth to Nexperia in 2017 — a company focused on manufacturing essential, high-volume electronic components.
The Chinese Takeover
In 2019, Wingtech, a Chinese electronics group with partial state ownership, acquired Nexperia. That move placed the company squarely at the center of the intensifying global competition over semiconductor technology.
Nexperia produces silicon chips in Germany and the UK, then ships them to China and other Asian facilities for cutting, assembly, and packaging. The company manufactures more than 110 billion chips a year, supplying vital components such as transistors, diodes, and power management systems for industries ranging from consumer electronics to automotive manufacturing.
Its global footprint grew even larger in 2022 with the acquisition of Dutch energy management specialist NOWI, further strengthening its position in the semiconductor supply chain. By 2024, Nexperia’s revenue exceeded $2 billion, confirming its place as a critical link in the world’s electronics ecosystem.
Dutch Government Moves In
In September 2025, the Dutch government invoked a rarely used Cold War–era law known as the Goods Availability Act, giving it direct control over Nexperia’s Dutch operations. Authorities cited “serious governance and security concerns,” arguing that unresolved issues within the company posed risks to Europe’s technological independence and industrial stability.
Soon after, a court in the Netherlands suspended Nexperia’s CEO, Zhang Xuezheng, who is also the founder of Wingtech, amid allegations of mismanagement. The decision marked a turning point in the growing standoff between Amsterdam and Beijing over control of high-tech assets in Europe.
China’s Retaliation
Beijing responded in early October by imposing export restrictions on Nexperia components produced in China and destined for Europe. The move quickly rattled global supply chains, especially in the automotive sector, which relies heavily on Nexperia’s chips for critical systems.
Major carmakers warned that extended disruption could paralyze production. Nexperia reportedly told its clients it could no longer guarantee regular shipments, following delays at its plant in Dongguan, Guangdong Province.
China’s Ministry of Commerce criticized the Dutch government’s actions as unwarranted interference, blaming them for “causing instability in global supply chains.”
Why These Chips Matter
Though Nexperia’s components are small and inexpensive, they are essential to modern vehicle design. In cars, these chips connect batteries to motors, power sensors and headlights, control braking systems, and operate airbags, infotainment, and window mechanisms.
Industry analysts estimate that around 70% of chips produced in the Netherlands are sent to China for packaging and final assembly before being exported worldwide. Any disruption in that loop — political or otherwise — quickly ripples through the entire automotive sector.
Impact on Automakers
The export freeze hit automakers almost immediately. Honda, Ford, and General Motors were among the first to cut or suspend production at factories in North America and Europe. Honda temporarily shut down its Canadian plant and reduced capacity in Mexico by half after running out of Nexperia-supplied chips.
In Europe, the Automobile Manufacturers Association warned that the available stock of Nexperia components would last only a few weeks. Mercedes-Benz confirmed it had only short-term reserves, while Volkswagen said its 2025 profit targets could be at risk if the shortage persisted. Some suppliers, like Omovio SE in Germany, began preparing to reduce working hours.
In the United States, the Auto Manufacturers and Equipment Association cautioned that American plants were just weeks away from facing the same problem if shipments didn’t resume.
Signs of a Truce
Amid growing tension, the United States stepped in to mediate between China and the Netherlands. Reports suggested that during a summit in South Korea, Presidents Donald Trump and Xi Jinping agreed on a framework allowing partial resumption of Nexperia exports to ease supply pressures.
Soon after, China’s Ministry of Commerce announced that it would exempt some Nexperia products from export restrictions, promising to evaluate requests based on “real market needs” and supply chain stability.
If implemented, these exemptions could provide short-term relief for automakers struggling with production delays. But the core dispute — involving ownership rights, security oversight, and control of advanced technology — remains unresolved, leaving the global semiconductor conflict very much alive.
