China Accuses Netherlands of Prolonging Chip Dispute, Threatening Global Auto Production

Escalation of Semiconductor Tensions

The ongoing dispute between China and the Netherlands over the Chinese-owned chipmaker Nexperia has intensified, with China's Commerce Ministry asserting that Dutch actions are causing 'chaos' in the global semiconductor supply chain. Beijing warned on Tuesday that the situation threatens worldwide automotive production, urging the Netherlands to 'stop interfering' in Nexperia's affairs and to work constructively towards a resolution.

Dutch Intervention and Chinese Retaliation

The conflict originated in late September 2025 when the Dutch government took control of Nexperia, a semiconductor manufacturer headquartered in Nijmegen, Netherlands, but owned by China's Wingtech Technology. This move, executed under the rarely invoked Goods Availability Act, was justified by the Dutch Ministry of Economic Affairs due to 'serious governance shortcomings' and concerns over a 'threat' to Europe's semiconductor capabilities and economic security. The Dutch government feared the potential transfer of intellectual property and operational shifts to China, leading to the ousting of Nexperia's Chinese CEO, Zhang Xuezheng.

In response to the Dutch intervention, China retaliated by halting exports of Nexperia products packaged in China. Approximately 70% of Nexperia's European production relies on packaging facilities in China. China's Commerce Ministry stated that the Netherlands had acted 'unilaterally' and failed to cooperate in resolving the issue. This action by Beijing prompted warnings from carmakers in the European Union, the United Kingdom, and Japan about impending supply shortages and potential production stoppages.

Global Automotive Industry at Risk

Nexperia specializes in producing basic yet essential chips used across various sectors, including the automotive and consumer electronics industries. The disruption in the supply of these components has raised significant concerns for global car manufacturers. While China announced on November 1 that it would grant exemptions for some Nexperia chip exports from China following discussions between US President Donald Trump and Chinese President Xi Jinping, Beijing's Commerce Ministry continued to accuse the Netherlands of inaction on November 4.

The broader context of this dispute includes:

• Nexperia's acquisition by Wingtech Technology in 2018, with Wingtech being partially state-owned.
• The US adding Wingtech to its Entity List in 2024, followed by Nexperia being designated an affiliated entity in September 2025.
• The UK government's 2022 order for Nexperia to divest its acquisition of Newport Wafer Fab due to national security risks.

Ongoing Diplomatic Efforts

Despite the escalating rhetoric, the Dutch economic affairs ministry has confirmed that discussions with Chinese authorities are ongoing. Both sides face pressure to find a resolution that stabilizes the semiconductor supply chain and mitigates further economic fallout for industries heavily reliant on these critical components.