Automotive News Europe — 2026-01-12
Automotive Industry
An effort by Europe to stand up to China and retain local technology is approaching a breaking point.
In a fight over a critical link in the global supply chain, chipmaker Nexperia was wrested away from its Chinese owner by a Dutch court and now one of the leaders in so-called legacy chips is racing to defend its independence. If the Nijmegen-based company is successful, Europe would hold on to valuable semiconductor manufacturing expertise and hand the region a rare victory over China.
By pushing back over Nexperia, Europe aims to “set a precedent for what ‘de-risking’ means,” said Benedetta Girardi, program coordinator at the Hague Center for Strategic Studies, referring to Europe’s objective of reducing dependencies on China. The intention is to show that Europe “wants sovereignty and autonomy as part of the conversation” over tech, even as it seeks to maintain trade relations with a key partner.
Since a Dutch court intervened in Nexperia’s ownership in October, the standoff has threatened to disrupt auto production in Europe and around the world. On one side, there’s the core of the company, which is in the hands of court-appointed trustees in the Netherlands; the other side is a key production site that’s aligned with dispossessed owner Wingtech Technology Co. — an electronics firm that’s 30 percent-owned by entities close to the Chinese state.
As Nexperia seeks to expand non-Chinese production capacity, Wingtech has stepped up efforts to regain control over the chipmaker it’s owned since 2019. It has initiated talks with the court-appointed trustees to try to settle the dispute, while also appealing to the Dutch supreme court over the suspension of its ownership rights.
A court hearing on Jan. 14 will determine whether there’s a quick resolution or a drawn-out legal tussle. The Amsterdam court could order an investigation into the chipmaker if it sees reasons to doubt how Nexperia was managed. On the flipside, the measures taken against Wingtech’s ownership of Nexperia and its founder could be dropped if the court opts against a probe.
The hearing is expected to have wide-ranging implications not just for Nexperia’s future, but the sustainability of the automotive supply chain and geopolitical ties.
Behind the scenes, meanwhile, the two Nexperias are preparing for a potential future without the other. For Nexperia China, that means finding alternative sources of wafers — the thin, flat slices of semiconductor material that’s usually made of silicon. For the Dutch parent, it means expanding other production sites to have enough capacity to meet customer demand. Both efforts are complex.
“Facing the predicament arising from the improper interference by the Dutch government, Nexperia China has actively carried out ‘production self-rescue’,” including procuring wafers elsewhere, Wingtech Chairwoman Ruby Yang told Bloomberg in an interview.
“Our wafer procurement cooperation in the Chinese market is a natural extension of this strategy,” she said, adding that the initiative is aimed at improving operations “rather than serving as a wholesale replacement for the existing supply chain.”
According to Yang, the Dutch side is investing about $300 million to expand other facilities with the goal of having 90 percent of its production capacity outside China by mid-2026. The projects demonstrate “a clear intent to de-couple from China,” she said.
The expansion plans at Nexperia’s sites in Malaysia and the Philippines aim to add tens of billions of units to annual capacity, according to people close to the situation. The company confirmed efforts to “accelerate existing capacity-expansion plans” but declined to comment on specific figures or targets.
With some Nexperia rivals such as US-based OnSemi signaling that they could scale up to take over Nexperia’s orders, there’s pressure to act fast and there’s little margin for error.
The messy dispute has prompted banks to withdraw hundred of millions of dollars of financing to Nexperia, including an untapped $800 million revolving credit line, said the people, who asked not to be identified since the discussions are private. The chipmaker said it is “debt-free and has a strong liquidity position, which is unaffected by events in recent months,” a spokesperson said in response to Bloomberg questions.
The acrimony publicly emerged in October when a court in Amsterdam ordered Wingtech’s ownership rights placed in a trust over allegations the firm was improperly transferring technology from Europe to China. It also suspended Wingtech founder Zhang Xuezheng as Nexperia’s chief executive officer on claims he was diverting resources to affiliated companies and hobbling the Dutch chipmaker. Wingtech has denied wrongdoing.
The court decision prompted Nexperia’s site in Guangdong — which has capacity for over 50 billion units a year, or about half of the group’s pre-crisis production — to stop cooperating with its parent in the Netherlands, which in turn halted wafer deliveries to China.
Alongside the internal corporate feud, the Dutch and Chinese governments stepped in. The Netherlands imposed oversight powers on national security grounds and Beijing restricted Nexperia’s exports from China. The political spat eased after deliveries were allowed to resume, but China continues to press for the Dutch to back down.
“There is clearly an intention to turn Wingtech into kind of a future champion,” said Mathieu Duchâtel, director of international studies at think tank Institut Montaigne. “For the Europeans, what it showed is the key importance of having safe access to assembly capacity, which is clearly a weak point.”
While Nexperia is a bit player in the global semiconductor industry, its importance is in its ability to produce chips that perform simple functions like controlling power supply at high volumes — about 3,000 components every second. While they’re low-tech, the components are used in almost every electronic device.
Nexperia’s operations are set up for an era of seamless global commerce. Wafers from facilities in Germany and the UK are shipped for testing and assembly to sites in China, Malaysia and the Philippines. From there, finished components are delivered to customers around the world, including back to Europe.
Concerns about supplies has spurred some big customers — such as auto-parts supplier Robert Bosch GmbH — to shuttle wafers from Nexperia facilities in Europe to China, according to people familiar with the matter. The process is costly and complex and consequently not seen as a long-term solution, the people said.
As part of its expansion plans, the Dutch parent has held talks with customers on investing in Nexperia’s sites in southeast Asia, the people said.
A Bosch spokesman declined to comment on supplier relationships for competitive reasons, but said the company remains in close contact with Nexperia and is working to minimize any production constraints.
Shortages of Nexperia chips have caught automakers by surprise. Honda Motor Co. halted production at several plants, while Volkswagen AG and others scrambled teams to secure alternatives. Top parts supplier ZF Friedrichshafen AG reduced output.
To avoid a similar choke point in the future, European nations are discussing how to subsidize backend production outside of China, a person familiar with the matter said. At the same time, China also faces pressure from the country’s carmakers, including BYD, to ensure stable supply, according to people briefed on the matter.
Even if one or both Nexperias survive or find a way to reconcile, the brand’s reputation has been damaged and that could be hard to repair and creates longer term uncertainties.
“As countries jockey for control over different stages of the semiconductor value chain, it’s going to lay out these potential breaking points,” said Jacob Feldgoise, senior data research analyst at Georgetown University’s Center for Security and Emerging Technology. “The risk associated with this situation was really not on anyone’s radar.”