China escalates Nexperia dispute as Malaysia shift looms

Beijing has criticized the Netherlands for failing to help Wingtech Technology regain control of Nexperia, a Dutch chipmaker, pushing the dispute onto the diplomatic stage again after a previous confrontation inOctober.

A Chinese Ministry of Commerce spokespersonurged the Dutch government to correct its “wrongdoing” and remove the obstacles to restore stability to the global semiconductor supply chain.

“It is perplexing that, in the face of widespread anxiety and concern within the global industry, the Dutch side remains unmoved and persists in its own course, showing no sense of responsibility whatsoever for the security of the global semiconductor industry and supply chains, nor has it taken any substantive action,” the spokesperson said.

The spokesperson said the Dutch side’s “improper” administrative intervention in Nexperia’s internal affairs in October had triggered a global semiconductor supply chain crisis, for which the Netherlands must bear full responsibility.

The comments followed Dutch Economic Affairs Minister Vincent Karremans statement to the daily De Telegraaf in a recent interview that government intervention in the Nexperia case had been unavoidable.

“I wouldn’t characterize it as enjoyable, but it was necessary,” Karremans said. “And I don’t let my decisions be guided by whether they’re enjoyable or not.”

The sharp diplomatic exchange contrasted with the tone struck by officials from both sides in late November, when Beijing and The Hague publicly emphasized cooperation following high-level meetings held on November 18 and 19. At that time, both governments spoke positively about efforts to stabilize semiconductor supply chains and reduce friction.

In late September 2025, the United States expanded its Entity List rules to automatically cover companies majority‑owned by sanctioned firms. Within days, the Dutch government invoked its Goods Availability Act to take temporary control of Nexperia, citing governance concerns.

On October 7, a Dutch court suspendedNexperia’s chief executive Zhang Xuezheng and appointed its chief financial officer Stefan Tilger as interim head.

In early October, Beijing restricted exports of Nexperia’s China-made chip products. Nexperia also halted wafer shipments to its Dongguan plant due to unsettledpayments from its unit, Nexperia China.

However, the Chinese government changed its strategyon October 15, seeking to resolve the dispute legally.It sentanotice of dispute to the Dutch government, complaining that the latter violated the2001 Agreement on Encouragement and Reciprocal Protection of Investments between China and the Netherlands.

It also askedNexperia China toresume shipments of its chip products, a move to de-escalate the situation ahead of a meeting betweenUS President Donald Trump and Chinese President Xi Jinping in South Korea on October 30.

In the meeting withXi, Trump agreed to delay the implementation of Washington’s new “penetrating sanction rules” by one year.On November 19, the Netherlands halted its intervention in Nexperia under the Goods Availability Act.Karremans described China’s moves to resume chip shipments as indicative of goodwill rather than of confrontation.

Investment in Malaysia

While Beijing believed the issue would be resolved at the corporate level,Wingtech said on November 28 that the Dutch side had broken its promise and failed to allow the company to restoreits control over Nexperia.

Nexperia China also said that its parent, Nexperia, planned to invest more than US$300 million to build a new factory in Malaysia, aiming to shift about 90% of its production capacity out of China by mid-2026.

A Hainan-based columnist says that, after all these struggles,the real intentions of the Dutch and US governments have become clear.

“The goal is to strip China out of Nexperia’s supply chain for mature chips and replace it with Malaysia,” the commentator writes, arguing that Chinese facilities would be left serving only domestic demand while most capacity was transferred overseas.

‘The goal is to strip China out of Nexperia’s supply chain for mature chips and replace it with Malaysia.’

Hainan-based columnist

That writer suspects thatNexperia’s Dutch executives had long planned to boost production in Malaysia significantly, so they sought a one-year court mandate to secure complete control of the company and suspend Chief Executive Zhang Xuezheng before he could block the plan.

He says that even if the Dutch management allowsWingtech toregain control of Nexperia a year later,the Malaysian supply chain will already be in place by then.

The columnist adds that Wingtech now faces two stark options:

• Single‑winner outcome (Nexperia): Wingtech allows the current arrangement to stand, with Nexperia China continuing shipments while most production capacity is gradually shifted to Malaysia by mid‑2026, effectively cementing Nexperia’s strategy.
• Double‑loss outcome: Wingtech immediately cuts off Nexperia China’s overseas shipments, stops recognizing Nexperia’s Dutch intellectual property, and pivots to domestic foundry capacity to focus on the Chinese market. In this scenario, Nexperia would lose its international customers, and even a completed Malaysia plant could struggle to secure buyers, pushing the business toward a prolonged decline.

Some observers said it may not be a wise choice for Nexperia China to halt its overseas shipments now, warning that such a move could violate the Xi–Trump understanding reached on October 30 and risk triggering a new tariff war.

International arbitration

In fact,Beijing has so far avoided the double‑loss outcome.

At a shareholders’ meeting on December 26,Wingtech’s Chairman Yang Mu said that sinceChina sent a notice of dispute to the Dutch government on October 15,Nexperia China’s factory in Dongguan has resumed chip shipments and delivered more than 11 billion chips to about 800 clients globally.

He accused Nexperia of cutting off wafer supplies to Nexperia China, publicly questioning the quality of chip products made in China, and pressuring suppliers at a global supplier conference to avoid working with its China operations.

He saidNexperia China has begun validating domestic wafer suppliers, with completion expected between the first and second quarters of 2026.

“If the issue remains unresolved within six months (from October 15), Wingtech may pursue international arbitration, with potential claims reaching up to $8 billion,” Yang said, adding that there will bea second hearing in January 2026.

Technically, Wingtech can pursue international arbitration on April 15, 2026. But the process may take several years to complete.

“Theproposed $8 billion damage claim includes the $3.6 billion Wingtech paid in late 2018 to acquire control of Nexperia, the appreciation of Nexperia’s assets in recent years, and the company’s future earnings potential,” an Inner Mongolia-based technology columnist says in an article.

“If the Netherlands refuses to pay, Dutch assets in China could face reciprocal seizure under Chinese law. This is not an empty threat,” the commentator writes. “China could also tighten regulatory scrutiny on Dutch companies or restrict exports of critical materials to ASML.”

“In a deeply interconnected global supply chain, any attempt to artificially sever links will ultimately backfire,” the writer said.

He argues that by intervening in Nexperia’s operations to please the United States, the Netherlands risks alienating China, the world’s largest market and one of the most critical controllers of global supply chains. He says such a trade‑off is economically and strategically unjustifiable.

Read: Nexperia control battle rages as China’s Wingtech files appeal

Follow Jeff Pao on Twitter at@jeffpao3