The Dutch government has taken control of Nexperia — the world's second-largest producer of discrete chips, owned by Chinese conglomerate Wingtech. The decision, motivated by fears that production would be relocated to Asia and by pressure from Washington, triggered retaliation from Beijing and an end to exports of these components to Europe. Supply shortages are hitting German giants such as Bosch and Volkswagen the hardest.
Nexperia, headquartered in Nijmegen, employs more than 25,000 people and produces key components such as diodes, transistors, and battery management chips that are essential for electric vehicles and electronics. Since 2019, the plant has belonged to China's Wingtech. Concerns intensified after signals from the United States that Wingtech was planning to move production lines to China, which would jeopardize European supply chains.
On October 13, Dutch Economy Minister Dirk Beljaarts announced the "temporary takeover of management in Nijmegen." "We cannot risk losing strategic assets," the Dutch minister said in justifying his actions. The intervention does not amount to nationalization. The Dutch government wants to find a European partner, such as ASML or Infineon, to keep the plant in the Netherlands.
Beijing responded harshly, imposing an embargo on exports from Nexperia's Chinese factories and blocking 30 percent of global supply. This is a blow to just-in-time supply chains, where components are delivered within a single day. On October 21, the Dutch minister spoke with his Chinese counterpart, seeking a compromise: "Dialogue is open, but sovereignty is not up for negotiation," Beljaarts stated. China accuses The Hague of protectionism, threatening escalation as part of a broader dispute over technology.
The matter is also escalating in Brussels. The German automotive industry is feeling the pain most acutely. Bosch, the world's largest auto parts supplier, has reported short-time work (Kurzarbeit) for more than a thousand employees in Salzgitter (Lower Saxony).
"This is a direct consequence of the Dutch-Chinese standoff," comments Horst Ott of the IG Metall trade union. The Salzgitter plant, which produces electronic modules, is awaiting approval from the labor office. The shutdown could last weeks. Volkswagen has secured production in Germany through the end of October, reportedly finding an alternative supplier, but Audi and Porsche still face chip shortages. Japanese firms such as Nissan and Toyota are signaling similar problems. In a broader context: European car demand has fallen by 20 percent since 2019, and chips account for 10 percent of production costs. The Nexperia crisis is, in the view of German experts, a symptom of weakness. Europe produces only 9 percent of the world's chips, depending on Asia (60 percent) and the United States (20 percent). Negotiations with China continue, but experts advise: build alliances with Taiwan and South Korea and do not further escalate the conflict with China.
