When the Dutch government seized Chinese-owned chipmaker Nexperia, it triggered a global supply scare, revealing how deeply Europe is trapped between American coercion and China’s growing technological muscle, and how vulnerable its industry has become in the Chip War.

On 30 September the Dutch government, citing national security and deploying a 1950 Cold War piece of legislation (the Goods Availability Act) seized control of a Chinese-owned company headquartered in the Netherlands. It set in motion a chain reaction that nearly shut down vehicle production on three continents.

The company, Nexperia, is a major supplier of semi-conductors to the automotive industry. The Dutch argued they needed to act to protect a vital part of European supply chains. Almost immediately, the Chinese struck back.

What happened next was a counter-strike of epic proportions and global implications.

Back in China, Nexperia’s owners, Wingtech Technology, decoupled their production facilities in Guangdong from Nexperia’s Nijmegen (Netherlands) headquarters. Simultaneously, the Chinese government issued an export block halting all future sales of components by the company, requiring those chips to be sold exclusively on the domestic Chinese market. Combined, these two moves set off a contagion of panic attacks amongst automotive executives in Europe, America and Asia.

Nexperia makes millions of transistors, diodes and power management components that are essential to cars produced by BMW, Honda, Hyundai, Mercedes-Benz, Nissan, Renault, Stellantis, Volkswagen, Volvo and many others. Car windows open, sensors detect objects, braking systems respond, air bags deploy and entertainment systems work because of these chips. These vehicles typically have dozens, sometimes over 100, Nexperia parts in them. About 70 per cent of the chip’s final value is added in China, the rest mainly in the Netherlands and UK.

The car industry relies on just-in-time delivery systems where components flow in a steady, carefully choreographed way across continents – which is highly efficient but relies on dependable supply chains. The Dutch threw a hand grenade into the system. But were they pushed to do so by the US?

The Dutch argued they wanted to increase control of a critical piece of the semiconductor supply chain. The motive was understandable, the execution appalling. Lurking in the background when the Dutch first struck, however, were US agents who gave the Dutch an offer they couldn’t refuse.

On 30 September – yes, the same day the Dutch seized Nexperia – the US Commerce Department had issued a new rule expanding its Entity List of companies that Washington deems a threat to its national interests. The rule was broadened to to include subsidiaries of any company already on the list – and Nexperia was now on the list because Wingtech, its parent, was on the list.

In various press releases, the Dutch government was adamant: there was no US involvement in its decision to seize Nexperia. The Dutch Economic Affairs Ministry released statements saying the timing was “purely coincidental”. But I have read the summary document of the ruling of the Court of Appeal in Amsterdam which found in favour of the government’s actions;  it is in black and white: US officials threatened dire consequences if the Dutch didn’t move against the Chinese owners.

The court’s summary describes a meeting between officials of the Dutch Ministry of Foreign Affairs and the US Bureau of International Security and Nonproliferation in which the Americans made clear the Chinese CEO “will have to be replaced to qualify for the exemption from the Entity List." The Americans also expressed frustration at the lack of progress in getting the Chinese to divest.

The main reason Wingtech got on the list in the first place was they purchased Nexperia from the Dutch!  In other words, the US, as part of its coercive containment strategy was giving the Dutch an offer they couldn’t refuse: get the Chinese to divest or we will ban Nexperia from the US and crush the company with a range of sanctions. One should recall the Huawei ban and the US muscling Taiwan’s chip maker TSMC not to sell high-end chips to China; this is just the latest move in many such pressure campaigns.

In early November the _South China Morning Post_ reported that China’s commerce ministry had agreed to a Dutch request to send over a team for negotiations.

Then on 19 November, the Dutch government announced it was relinquishing control of the company.

The court’s summary describes a meeting between officials of the Dutch Ministry of Foreign Affairs and the US Bureau of International Security and Nonproliferation in which the Americans made clear the Chinese CEO “will have to be replaced to qualify for the exemption from the Entity List." The Americans also expressed frustration at the lack of progress in getting the Chinese to divest.

The main reason Wingtech got on the list in the first place was they purchased Nexperia from the Dutch!  In other words, the US, as part of its coercive containment strategy was giving the Dutch an offer they couldn’t refuse: get the Chinese to divest or we will ban Nexperia from the US and crush the company with a range of sanctions. One should recall the Huawei ban and the US muscling Taiwan’s chip maker TSMC not to sell high-end chips to China; this is just the latest move in many such pressure campaigns. Europe is struggling under energy costs 150 per cent higher than the US, disjointed policies across the EU and a seemingly irreversible deindustrialisation crisis. It has no coherent plan to create a vertically integrated tech industry that can create a level of independence from the two behemoths. The Nexperia debacle was just the latest chapter in the Chip War and a clear demonstration of Europe’s weakness.

We have lived through some astonishing moments in the Chip War. The Huawei Ban was meant to cripple China’s rising tech star; instead it acted as a tremendous spur for China to invest hundreds of billions of dollars into rapidly catching up with the US and dispensing with their products. Case in point: US semi-conductor giant Nvidia’s once-dominant presence in China has collapsed to zero, in large part thanks to US sanctions on China which began in 2022 and culminated in China itself banning purchases of Nvidia chips by state-backed firms in 2025.

Responding to the China challenge Washington launched the CHIPS and Science Act (2022), a $280 billion plan to onshore semiconductor manufacturing and boost AI, quantum computing, robotics and other applications. The second Trump administration has given the sector additional financial boosts.

In 2023 as part of a US policy of ‘coercive containment’ the Dutch were forced by the US to block their own biggest company ASML from selling the world’s most advanced lithography machines to its biggest customer – China. It cost the Dutch hundreds of millions of Euros – but anything to please Uncle Sam. 

The Chip War has exposed how fragile the global semiconductor supply chain is when superpowers lock horns. Now that we have fully returned to gangster capitalism and the US is squeezing friend and foe alike, we have the added complexity that the Chinese have reached a critical economic and  geopolitical moment where they can show just how much they have learnt from their American tutors of how to conduct business.

The views expressed in this article may or may not reflect those of Pearls and Irritations.

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