Nexperia seizure: Impact on Wingtech and Nexperia, and what it reveals about fractured global chip supply chains
On Sunday evening, news that shocked China’s entire semiconductor industry broke: Wingtech announced that the Dutch government had issued a ministerial order freezing all of Nexperia’s assets, intellectual property, operations, and personnel changes for one year—effectively seizing control of the semiconductor company.
The move has sparked outrage among industry players and investors, with many labeling the Dutch action as “robbery.” This incident represents yet another casualty of the escalating China-U.S. technology rivalry and reveals a sobering reality: the semiconductor industry, inherently global in nature, faces an unprecedented test as decades of rule-based, trust-driven cooperation models are now being overridden by national security concerns. The case serves as a textbook warning for any Chinese company attempting to acquire core technology through overseas acquisitions, demonstrating that such deals are no longer viable in the current geopolitical climate.
During an investor call on Sunday, Wingtech explained that the Dutch government has effectively pressed the “pause button” on Nexperia, with courts appointing a temporary administrator to manage the company alongside foreign executives. While Wingtech’s operational and management rights have been suspended, the company emphasized that shareholder economic interests remain unchanged, with 100% of Nexperia’s profits still belonging to the listed company.
Before analyzing the broader implications, lets first take a look on this incident’s origins, which appear to be part of a carefully orchestrated plan rather than a sudden decision.
Wingtech’s acquisition of Nexperia—spun off from semiconductor giant NXP—for 33.2 billion yuan in 2018 was widely viewed as a case of “snake swallowing an elephant.” At the time, Wingtech was China’s largest smartphone ODM, a business it has since divested. The deal’s driving force was Wingtech’s founder, Zhang Xuezheng.
Zhang’s career has been marked by bold ventures and high-risk capital operations. After graduating from Guangdong University of Technology in 1997 and working at STMicroelectronics and ZTE to gain valuable semiconductor and telecommunications experience, Zhang founded Wingtech in 2006 with just 100,000 yuan.
The original acquisition received positive responses, including from the Netherlands. Dutch financial media Het Financieele Dagblad viewed the injection of “Chinese capital” as key to the nascent chip company achieving a “growth sprint.”
While Zhang immediately assumed the CEO role following Frans Scheper’s unexpected “early retirement,” Wingtech largely avoided interfering with daily operations, which were led by three key executives: Achim Kempe (COO), Stefan Tilger (CFO), and Ruben Lichtenberg (CLO).
However, Zhang’s subsequent overseas acquisition attempts since then have planted seeds of discontent and raised awareness about Nexperia’s Chinese ownership. These included the 2021 attempt to acquire the UK’s Newport Wafer Fab, which was blocked the following year, and a deal involving Dutch startup Nowi, which specializes in energy chips.
U.S. sanctions ultimately put the entire arrangement in jeopardy. By 2024, the external environment deteriorated rapidly, catalyzing internal conflicts at Nexperia. In April 2024, the company disclosed a cyberattack that resulted in the theft of confidential data, including customer information and chip designs, further heightening Dutch authorities’ concerns about data security. By late 2024, the U.S. formally added Wingtech to its Entity List.
The final nail in the coffin came last month when the U.S. expanded restrictions, stipulating that any company controlled by more than 50% by an Entity List company would face equivalent restrictions, regardless of its name. This directly impacted Nexperia, subjecting its transactions with U.S. suppliers to strict controls.
The impact of U.S. rules has been enormous. Previously, Chinese ownership represented more of a political and reputational risk that European teams could address by emphasizing localized operations. However, this month’s U.S. regulations transformed this risk into a real, existential operational and survival crisis.
This impact manifests in two critical ways:
Supply chain disruption, as Nexperia’s operations depend on global supply chains containing significant U.S. technology and equipment, meaning sanctions could interrupt the supply of key components and services at any time;
Market access barriers, as major global customers, particularly in automotive and consumer electronics, may begin seeking alternative suppliers to avoid their own compliance risks.
For operational and financial executives like Kempe and Tilger, this meant the company’s lifeline was about to be severed. The Chinese controlling background was no longer a growth engine but had become a “strategic liability” for the company’s survival. Taking extreme measures to separate from the parent company became the only rational business choice to prevent total destruction.
Manufacturing Facilities Being Fractured
The drama raises major questions about what’s next for both Nexperia and Wingtech. Nexperia’s importance cannot be understated—it’s a hidden champion in automotive electronics, with its diodes, transistors, and logic chips embedded in power management, infotainment, and body control systems of virtually all mainstream vehicle models globally.
For Wingtech, this is a business it cannot afford to lose. In 2024, Nexperia generated 14.7 billion yuan in revenue, accounting for 20% of Wingtech’s total. It’s no exaggeration to say that Nexperia carries Wingtech’s hopes for future development, as the company announced earlier this year its intention to focus 100% on the semiconductor business while divesting its ODM operations (selling to Luxshare Precision for 4.389 billion yuan), which accounted for the remaining 80% of 2024 revenue.
Before the 2018 acquisition, Nexperia already had the majority of its manufacturing in China through its Dongguan, Guangdong facility, which has been ramping up since the acquisition. Currently, 80% of Nexperia’s final product shipments come from mainland China, with 70% from the Dongguan assembly and test facility and 10% from third-party assembly and test facilities. Since the company focuses on mature node manufacturing, production has largely remained unaffected by U.S. semiconductor equipment restrictions, which target advanced nodes.
Management stated during Sunday’s investor call that they are actively evaluating a closed-loop Chinese supply chain, maintaining communication with suppliers and customers, and preserving stability among employees, production, and channels to minimize external shocks. Geographically, China accounts for 48% of Nexperia’s revenue, nearly half the total. Management indicated that all products face no restrictions under U.S. sanctions rules when selling to clients.
A Fractured Future
Significant uncertainty remains, and it’s unclear how the U.S. Commerce Department’s 50% rule will evolve, especially as China cited this as a major reason for imposing new restrictions on rare earth elements last week. The Chinese government’s response also remains unclear.
What Wingtech faces now is an unprecedented state of division. The Dutch “custodial” management team and China’s production operations team are no longer legally part of a coordinated whole. Strategic decision-making, technology process integration, global order allocation, and financial settlement systems have fallen into chaos.
If the Dongguan factory’s exports are suspended, it means that half of the Wingtech’s total production would instantly “disappear” from global markets. For Nexperia, if it breaks away from China, rebuilding manufacturing facilities would pose a major challenge.
More broadly, this case reveals that the semiconductor industry is no longer truly global. The rule-based, trust-driven cooperation model that the global semiconductor supply chain has built over decades faces fundamental challenges. For Chinese firms, this serves as a textbook warning that overseas acquisitions to obtain core technology are no longer feasible in the current environment.