The situation involving Will Semiconductor and Nexperia has become a widely discussed topic. To summarize briefly， the United States exerted pressure on the Netherlands， urging it to impose sanctions on Will Semiconductor， a Chinese company. In response， the Netherlands took action against Nexperia， a wholly-owned subsidiary of Will Semiconductor based in the Netherlands and a major chip manufacturer， aiming to oust Chinese ownership and install local management.
China， in retaliation， has frozen the company’s factories and warehouses within China， preventing any shipments. This move has caught the Netherlands off guard， and numerous European automotive companies are now facing production line shutdowns due to chip shortages， leading them to pressure the Dutch government.
In the days following this development， there have been urgent discussions and communication efforts to resolve the situation. The situation has been characterized by a sense of a subordinate entity acting without foresight， now seeking leniency from a dominant power.
This incident can be seen as a self-inflicted wound， often described by netizens with the idiom “pushing a mill on one’s buttocks—turning in circles and losing face.”
Beyond the commentary， many netizens are curious about the background of Will Semiconductor and Nexperia. How did these entities become crucial to the geopolitical strategies of the US， China， and the Netherlands， and why do they hold such sway over European automotive manufacturing?
To understand this， we need to examine the history of Nexperia. Nexperia’s origins trace back to Philips’ core semiconductor division， a prominent European entity. It later became a business unit within NXP Semiconductors. Despite its long and distinguished lineage， Nexperia has， in a sense， been divested by its former parent. NXP， focusing on high-profit sectors like IoT and automotive chips， considered the power semiconductor segment， where Nexperia operates， to be of lower technical and profit value， thus opting to spin it off.
Specifically， Nexperia specializes in power semiconductors. While these are indeed chips， they differ from the commonly understood CPUs and GPUs. They are， in essence， components like diodes， transistors， and MOSFETs. The technology involved has its complexities， but it does not represent the absolute cutting edge， relying heavily on mature manufacturing processes. Nexperia’s strength lies in its long-standing presence and deep expertise in the automotive-grade chip sector， having accumulated significant experience and a vast customer base over many years.
Automotive components often require lengthy validation periods， sometimes spanning several years， before a chip manufacturer is certified and added to a procurement list， which typically remains unchanged for extended periods. Through its history and established relationships， Nexperia has become a dominant player in several niche markets. Its small-signal diodes and ESD protection devices consistently rank globally number one， and its automotive-grade power MOSFETs are the second largest globally. Nexperia holds a significant 40% global market share for inverter chips， critical for electric vehicles. This makes it a vital supplier for European automakers like Volkswagen， BMW， and Mercedes-Benz. While it might be an overstatement to say that the European automotive industry’s chip supply chain rests entirely in its hands， it is undeniable that without Nexperia， these manufacturers would face immediate production challenges.
Recognizing its importance， Will Semiconductor acquired Nexperia entirely in 2019 for over 3.4 billion euros， making it a subsidiary under Chinese ownership. Zhang Xuezheng， the head of Will Semiconductor， is a shrewd entrepreneur with a finance background from Tsinghua University. After a stint in investment， he founded a company that became a leading global player in ODM (Original Design Manufacturer) services for major tech firms like Huawei and Xiaomi， significantly intensifying competition in the sector. Driven by ambition， Zhang sought to move upstream into the semiconductor industry， leading to the strategic acquisition of Nexperia. Since coming under Chinese ownership， Nexperia， once considered a modest growth prospect by NXP， has experienced a remarkable turnaround and significant growth. By October 2024， Nexperia had repaid all its initial debts， with impressive financial performance. Data indicates that from its acquisition until 2025， Nexperia’s revenue increased by 60%， and its net profit saw a multi-fold increase. Crucially， it has benefited immensely from the rise of China’s new energy vehicle market， with 40% of its shipments now destined for Chinese EV manufacturers. This symbiotic relationship has been mutually beneficial， with the Netherlands also gaining from this partnership. Over the five years since Will Semiconductor’s acquisition， Nexperia has paid 130 million euros in corporate taxes， and its factories in the Netherlands and Germany have created 5，000 jobs， demonstrating a significant positive economic impact.
Image source: Will Semiconductor
The situation took a turn with the intervention of the United States. In December of the previous year， Will Semiconductor was placed on the US export control entity list， at which point Nexperia stated it was unaffected. However， in June of the current year， US officials met with their Dutch counterparts， indicating an expansion of sanctions against Will Semiconductor that would impact Nexperia. Consequently， on September 29th， the US announced an expansion of its control measures to include subsidiaries of companies on the entity list， which specifically included Nexperia. This meant Nexperia would also be subject to US export controls. Shortly thereafter， on the following day， the Dutch government issued a statement citing threats to the continuity and security of crucial technological knowledge and capabilities in the Netherlands and Europe， and the need to “gank” Nexperia. This resulted in the freezing of 30 affiliated entities of Will Semiconductor， including Nexperia， the suspension of CEO Zhang Xuezheng， and the transfer of control to foreign directors.
The Dutch government’s actions， seemingly a direct response to US directives， are noteworthy. The legal basis cited， the “Continuity of Supply Act，” is a rarely used Cold War-era law designed to address wartime material shortages. Critics argue that invoking such legislation in the current context is disingenuous， suggesting an intent to seize a profitable asset. Executives from Will Semiconductor have reportedly criticized the Dutch Ministry of Economic Affairs as a “sheep following behind the US.” While the stated reason is “preventing supply risks，” the underlying objective appears to be the appropriation of a valuable asset that was revitalized under Chinese ownership， ostensibly to appease the US and garner benefits， sacrificing integrity in the process.
Image source: Nexperia official website
However， the Netherlands is no longer the global power it was during the Age of Discovery. Following the Dutch government’s move to seize control， China’s Ministry of Commerce issued an export control announcement， directly prohibiting Nexperia’s Chinese entities from exporting any finished or semi-finished products manufactured in China.
`This action caught the Dutch completely unprepared. Although Nexperia’s headquarters are in the Netherlands， its largest and most critical backend packaging and testing facilities are located in Dongguan and Huizhou， China. Wafers produced in European factories are shipped to China for packaging and testing， becoming finished chips before being sold globally. With China’s directive， the 80，000 square meter factory in Huizhou and the Dongguan base have effectively halted production， with all lines operating on a reduced schedule. Products valued at hundreds of millions of dollars in wafers and packaged components are now held in bonded warehouses， unable to be shipped. This is just the case with Nexperia; giants like ASML， which are highly dependent on the Chinese market， have yet to face direct countermeasures from China. The immediate fallout of China’s retaliatory measures was not primarily felt by the Dutch government， but rather by European automakers， who erupted in protest. The European Automobile Manufacturers’ Association (ACEA) issued a warning that chip inventories could be depleted within weeks， leading to potential production line stoppages. Volkswagen， BMW， and Mercedes-Benz are likely intensely frustrated with the Dutch government， questioning their decision to jeopardize the automotive sector’s chip supply chain in pursuit of an alliance with the US， especially during a critical period of electrification transition.
A particularly dramatic development occurred within Nexperia itself. While the Dutch headquarters asserted control， Nexperia China issued a public statement effectively severing ties， declaring that any directives from headquarters would be disregarded and that employee salaries and benefits would continue to be paid by the Chinese entity. This internal conflict between a multinational corporation’s headquarters and its key subsidiary is a rare occurrence in business history.
As netizens have observed， the Dutch have essentially undermined themselves. They are now in a position of having to explain their actions to the United States while simultaneously negotiating with China to reopen their warehouses. The most significant victim in this scenario is Nexperia itself， finding itself caught in geopolitical crossfire and potentially losing access to its largest future market. The technical barriers for Nexperia’s automotive-grade chips are not insurmountable， and this incident will undoubtedly accelerate the push for domestic substitution among Chinese new energy vehicle manufacturers.
Ultimately， supply chain issues， which should be resolved through commercial means， have been weaponized for political gain. The outcome benefits no one. China’s resolute response demonstrates a clear stance: the era of arbitrarily confiscating Chinese assets through unilateral decrees is over. In a globalized world facing increasing geopolitical complexities， any attempt to leverage foreign assets as bargaining chips requires careful consideration of one’s own capabilities and potential repercussions.
