The Nexperia Hysteria

The world in the 1950s was in the midst of a metamorphosis. 

It was recovering from World War II, which had battered nations. Factories that had been burned to the ground were being rebuilt, ports that were bombed were being brought back to life, and people were slowly stitching their lives back together.

But beneath all this, a different kind of war was taking shape — one without guns, bombs, or battlefields. A war fought with ideologies and alliances. Two nations competing in science, espionage, space races, and nuclear arms. It was the Cold War between the United States and the Soviet Union, a period in which nations were forced to choose sides. 

Caught in this new world order was the Netherlands, a small nation still rebuilding from the devastation of World War II. 

The Dutch government knew it couldn’t survive another war of shortages and disruption, so it introduced the Goods Availability Act in 1952. 

The Goods Availability Act granted the Dutch government the authority to secure and control essential goods, such as food, fuel, and raw materials, during times of crisis. It was created to make sure the Netherlands would never face wartime shortages and supply breakdowns again.

For nearly eight decades, it remained unused and untouched. 

Until now. 

In October 2025, the Dutch government invoked the Act for the first time to take control of Nexperia, a semiconductor firm central to Europe’s car industry. The move sent immediate shockwaves through the continent’s already fragile automotive supply chain.

In this issue of CrossDock, we trace Nexperia’s origins, explore why it became a target, examine how one legal stroke rattled global automobile manufacturing, and discuss the roles China and the United States now play in this geopolitical contest.

To understand all this better, we need to know the story of Nexperia, so let’s begin from there.

NVIDIA officially reports earnings November 19, but you can get a sneak peek right now.

Not just for NVIDIA, but for dozens of public companies.

On Polymarket, the world's largest prediction market (with verified 95.2% accuracy), you can see what top forecasters believe will happen.

Our new Earnings Markets let you:

Will Jensen stun Wall Street again?

Or is the AI trade finally cooling off?

Top forecasters are already positioning.

See Latest Earnings Forecasts

Nexperia traces its lineage almost a hundred years back to Philips, the Dutch electronics giant that was a pioneer of Europe’s semiconductor manufacturing. Interestingly, the seeds of that legacy were planted through two key acquisitions made by Philips in the 1920s— Mullard in the UK and Valvo in Germany.

In 1923, to meet the BBC’s growing demand for radio technology, Mullard — a British valve manufacturer — partnered with Philips. The partnership soon deepened, and by 1927, Philips had fully acquired Mullard, gaining access to advanced valve (vacuum tube) technology and a foothold in the UK electronics market.

Similarly, in the mid-1920s, Philips also acquired Valvo, a German maker of radio valves and electronic components. This acquisition gave Philips a manufacturing base in Germany and further strengthened its expertise in vacuum tubes. 

But why did these acquisitions matter? 

That’s because these were not any normal companies. They were pioneers in vacuum tubes and early electronic components, the direct ancestors of transistors and today’s semiconductors. With them, Philips acquired not just factories, but engineering talent, patents, and the technological foundation needed for future chipmaking.

Philips used this early expertise to establish semiconductor factories in Nijmegen, Netherlands, and Hamburg, Germany. By 1955, the Nijmegen plant employed over 1,100 workers, producing millions of diodes and germanium-based semiconductors that powered radios and televisions across Europe.

In February 2017, NXP Semiconductors sold this division to a Chinese investor consortium led by Jianguang Asset Management (JAC Capital) and Wise Road Capital, and the business was rebranded as Nexperia. 

But the real twist came two years later. In 2019, Nexperia was fully acquired by Wingtech Technology, a Chinese electronics manufacturer, where the Chinese government held partial stakes for $3.6 billion. 

With that deal, Nexperia’s identity fundamentally changed — it became a Chinese-owned company headquartered in the Netherlands, built on European semiconductor heritage but now tied to Beijing’s industrial strategy.

And this is precisely what set off alarm bells in the United States.

It has been more than three decades since the Cold War ended. Russia is no longer America’s arch nemesis. In fact, it doesn’t come close to matching U.S. industrial strength or military power. Yet, in a twist of tales, the world has once again fallen into a great-power standoff. Only this time, it isn’t Washington versus Moscow — it’s Washington versus Beijing.

What’s worth noting is that China is not just an ideological or military competitor. It is a manufacturing powerhouse, the world’s factory floor, and the only country that can challenge the United States simultaneously in economics, technology, supply chains, and geopolitics.

So Nexperia, in many ways, checked all the boxes that make Washington uneasy. It was a European semiconductor firm owned by a Chinese company that has partial backing from the Chinese government and is even headed by a Chinese CEO, Zhang Xuezheng. 

To make matters more complicated, China’s National Intelligence Law, passed in 2017, legally requires all Chinese companies and citizens to assist the government in intelligence or data gathering if asked, whether they operate within China or abroad. This means China could essentially use Nexperia to control the flow of critical chips — deciding who gets them and who doesn’t.

And this is exactly what did not sit well with the United States. Washington, for several years, has been actively trying to curb Nexperia’s global footprint and prevent Chinese influence over Western chip infrastructure.

For example, in April 2022, a bipartisan congressional group — the China Task Force (CTF) — sent a letter to President Biden urging him to use diplomatic pressure on the UK government to block Nexperia’s acquisition of Newport Wafer Fab, the country’s largest semiconductor plant.

And in December 2024, the U.S. took things a step further by adding Wingtech — Nexperia’s parent company — to its Entity List, effectively blacklisting it from buying American technology without a license.

However, the real turning point came in September 2025, when a new U.S. rule declared that any company 50% or more owned by an entity on the Entity List or the Military End-User List would automatically be blacklisted as well. This meant that Nexperia could soon be added to the list, which ultimately forced the Dutch government to take action.

On September 30, 2025, the Dutch government intervened and, for the first time in 73 years, invoked the Goods Availability Act of 1952, taking control of Nexperia.

Soon after, the Companies Chamber of the Amsterdam Court of Appeal suspended Nexperia’s CEO and Wingtech founder Zhang Xuezheng, citing mismanagement and governance failures. According to court filings, he authorised the purchase of nearly $200 million worth of components from a company he personally owns, even though Nexperia only required around $70–80 million in inventory.

The actions taken in the Netherlands sent ripples all the way to China.

Following the court’s decision and government intervention, Wingtech’s shares plunged 10% on the Shanghai Stock Exchange. To retaliate, Beijing blocked Nexperia’s products from leaving China, forcing the company to inform carmakers that it could no longer guarantee chip deliveries.

So you might be wondering — if Nexperia is based in the Netherlands, how can China block its chips? And why do these tiny components matter so much in the first place?

Let’s break it down for you. 

Headquartered in Nijmegen, the Netherlands, Nexperia operates a global and highly interconnected supply chain, typical of the semiconductor industry. The company manufactures what are called foundation chips — small, basic components, including transistors, diodes, and power management chips. They’re not advanced chips, but extremely essential. In 2024 alone, Nexperia produced around 110 billion of these chips and generated $2.06 billion in revenue.

And this is how Nexperia’s supply chain works:

The process starts in Europe. Chips are first fabricated in factories in Germany and the UK. From there, they are shipped mainly to China, and then the Philippines and Malaysia, where they are assembled, tested, and packaged. Once finished, these components are exported again — to customers in Europe, Asia, and the rest of the world.

Now, here’s the real question: why do these tiny components matter so much?

These chips are simple and inexpensive, but they’re essential to almost every device that uses electricity. 

In cars, they power everything from the connection between the battery and the motor to headlights, sensors, braking systems, airbag controllers, infotainment units, and even electric windows.

So, when China blocked the export of Nexperia chips, the automotive industry was among the first and worst hit.

German auto giant Volkswagen first sounded the alarm, warning of temporary production shutdowns due to China’s export restrictions on Nexperia semiconductors. Nissan, on the other hand, has forecast an operating loss of ¥275 billion ($1.8 billion) for the current fiscal year, partly attributed to the growing impact of the Nexperia chip shortage. 

Across Europe, several carmakers have cautioned that they may be forced to halt production lines as supplies of Nexperia chips — a key source of standard automotive semiconductors — continue to dwindle.

It is not just the auto industry. In fact, the entire European tech ecosystem is heavily dependent on Nexperia. 

It is not just Europe. The United States seems to be the next in line. 

The Alliance for Automotive Innovation — which represents major automakers such as General Motors, Ford, Toyota, Volkswagen, Hyundai, and others in the U.S. — warned that any prolonged disruption in Nexperia’s chip supplies could impact American car production and exacerbate existing supply chain pressures.

So all this happened in October. What’s the current state of this Nexperia issue?

Luckily, a silver lining came in the form of a trade truce between the U.S. and China. The recent trade truce between the U.S. and China brought a brief pause to escalating tensions. As part of it, Washington agreed to delay the September rule that would have blacklisted dozens more Chinese tech firms — a move that also eased, at least temporarily, the pressure surrounding the Nexperia stalemate.

According to a Reuters report, the Trump administration is also prepared to announce that Nexperia’s manufacturing facilities in China will be allowed to resume shipments.

So, if these chips are so simple, why can't another company fill the gaps left by Nexperia? 

A straightforward replacement in this case is almost impossible. Yes, carmakers keep some inventory and have alternative suppliers — but they cannot switch suppliers overnight. Nexperia produces chips in such huge volumes that replacing it is almost impossible in the short term.

Additionally, in the automotive industry, every chip used in a vehicle must pass rigorous safety and quality tests. Certifying a new supplier can take months.

Finally, globally, only a handful of companies make these kinds of “discrete” chips — firms like Infineon, Onsemi, STMicroelectronics, Renesas, and Fuji Electric. But Nexperia alone controls around 40% of the global market, making it one of the most indispensable and vital players in the automotive supply chain.

The U.S.–China rivalry has played out through tariffs, TikTok bans, and rare earth embargoes; today, semiconductor supply chains are a new battleground, and Nexperia has become one of its most unexpected players.

Will diplomacy be enough to bring this situation under control, or will it only buy time before tensions flare up again?

Can the Netherlands and China actually reach a workable agreement — one that protects Europe’s supply security, or will Nexperia become the first in a series of supply chain breakdowns — a sign that future tech disputes between the U.S. and China may spill even deeper into industries like automotive, energy, and electronics?

There are no answers. But one thing is clear — in the end, whoever controls the smallest chips may decide the world’s biggest outcomes. 

This newsletter was written by Shyam Gowtham

Enjoy reading our weekly CrossDock deep dives? Don’t keep us a secret!
Share CrossDock with your friends and network.