Nexperia Threatens New Automotive Semiconductor Crisis

The semiconductor manufacturer Nexperia has accused its former CEO, Zhang Xuezheng, of spreading "falsehoods" about the company's situation in China, marking a new chapter in the crisis sparked by the Dutch government's decision to take control of the company.

In a statement released on Monday, Nexperia alleged that Zhang has undertaken "unauthorised actions" since being suspended by court order in the Netherlands. "Claims that Nexperia has not been paying its employees' salaries are incorrect and misleading," the company added, labelling the information published by its former management in China as "false."

The conflict escalates following the Dutch government's unprecedented intervention in Nexperia last month, highlighting the growing trade tension between Europe and China over the semiconductor sector.

Nexperia, headquartered in Nijmegen, Netherlands, was acquired in 2019 by China's Wingtech Technology, based in Jiaxing. Its founder, Zhang Xuezheng, took over as CEO in 2020. However, in June this year, the United States warned that Nexperia needed to replace Zhang to qualify for an exemption from the sanctioned companies list, following Wingtech's blacklisting by the US Department of Commerce in 2024.

US pressure prompted the Dutch government's intervention, justified by the need to preserve European technological autonomy. According to Economy Minister Vincent Karremans, if the government had not acted, "Europe would have been 100% dependent on foreign entities for this type of chips, in terms of knowledge, experience, and capacity."

Zhang's dismissal has fractured the company and provoked a strong reaction from China. Nexperia's Chinese subsidiary published a message on its official WeChat account on Sunday, stating that local employees have the right to ignore instructions from the Dutch headquarters. "The domestic unit is a Chinese company with deep-rooted operations in China," the statement noted.

Beijing's response was swift. The Chinese Ministry of Commerce has blocked the export of Nexperia products from the country and urged the Netherlands to "correct its mistake."

Karremans confirmed in an interview on the Dutch program Buitenhof that he will hold talks with his Chinese counterpart and the European Commission to seek a diplomatic resolution to the crisis.

"On October 10, automakers and suppliers received a notice from Nexperia outlining a sequence of events that resulted in the company no longer being able to fully guarantee the supply of its chips to the automotive supply chain."

The German automotive manufacturers association, VDA, indicates that this situation could lead to significant production cuts – even stoppages – in the near future if the supply disruption cannot be resolved quickly.

This has revived echoes of the previous semiconductor crisis, which was triggered in 2020 by the Covid-19 pandemic and intensified the following year, highlighting the global interdependence of companies reliant on a single critical component controlled by Taiwan.

At that time, manufacturers saw their overcapacity and inventory issues alleviated, allowing them to focus on more lucrative models and record profits. However, global vehicle production fell by 9% and has yet to recover to pre-2020 levels.