Semiconductor tensions rise between China and Europe

The fight between China and Europe over semiconductor control is at a tipping point after chipmaker Nexperia was stripped away from its China-backed owner Wingtech by a court in the Netherlands on Friday.

Europe desperately wants to keep Nexperia out of China’s grip and is using this case to draw a red line because it believes it can find some sort of cheat code that Xi Jinping uses in the AI Wars.

Court ruling splits Nexperia into two and freezes the chip supply

This started back in October when a Dutch court ruled against Wingtech Technology, which has owned Nexperia since 2019. The court handed control of the company to a team of Dutch trustees and suspended Wingtech’s rights.

That instantly broke the company in two. One part in the Netherlands, the other at a huge factory in Guangdong, which is loyal to Wingtech and churns out more than 50 billion chips a year.

The court said Wingtech was secretly moving tech out of Europe and over to China. It also kicked out Wingtech’s founder, Zhang Xuezheng, from the CEO role, saying he was draining resources from Nexperia and passing them to his other businesses. Wingtech said none of it was true.

Then the dominoes started falling. Nexperia’s Dutch team stopped shipping wafers to China. The Guangdong site cut off cooperation. Banks pulled out hundreds of millions of dollars, including an untouched $800 million credit line. A company rep said Nexperia is still “debt-free and has a strong liquidity position,” but that didn’t stop the cash from drying up.

Now, there’s a new hearing. The Amsterdam court is deciding whether to investigate how the company was run. If it does, this could drag on for years. If not, Wingtech might get its stake back. Either way, both sides are gearing up for the worst.

Automakers take the hit while both sides try to stay alive

Inside Nexperia, both teams are scrambling. The Dutch side is trying to grow chip production outside China. They’ve started talking to customers about putting money into plants in Southeast Asia.

Meanwhile, Wingtech is trying to keep Nexperia China alive by buying wafers from somewhere else. Ruby Yang, who chairs Wingtech, said they were doing a “production self-rescue” after “improper interference by the Dutch government.”

The whole mess slammed automakers. Honda shut down plants. Volkswagen rushed to find chip supplies. ZF Friedrichshafen cut production. Bosch started flying wafers between continents just to keep the assembly lines running. It’s expensive. It’s slow. And it’s not something anyone wants to keep doing.

The governments joined in. The Netherlands put new rules in place on national security grounds. China hit back by blocking Nexperia exports. Some shipments started again later, but China hasn’t stopped pressuring the Dutch to back off.

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