The Dutch government placed Nexperia — headquartered in the Netherlands but owned by China’s Wingtech — under emergency state supervision. Washington had urged The Hague to act, warning that Chinese ownership of a European chipmaker carried strategic risks.
Beijing hit back quickly. China blocked exports of Nexperia-made chips from its own factories, shaking Europe’s automotive and electronics sectors. Within days, shockwaves rippled across the continent’s industrial base. This is the core dilemma now facing the transatlantic alliance: leaders talk about “de-risking,” but keep edging toward the far more disruptive idea of “decoupling.” Nexperia shows why that vision is largely illusory. China’s retaliation, and its willingness to bypass Dutch regulators altogether, reveals the price of trying to push Beijing out of critical supply chains. Those costs are immediate — shortages, stalled production, destabilized industries.
Asian competitors like Vietnam, India, or the Philippines have built respectable back-end manufacturing capacity, but global supply chains can’t be rerouted overnight. Dependencies are deep, contracts long-term, and the capital required to replace China’s scale is staggering. Matching that capacity would take years of coordinated public and private investment.
The irony is unavoidable: Nexperia itself bought the Newport Wafer Fab in the UK in 2021, only to be forced to divest on national security grounds. That era is ending. Beijing is now far more assertive and intent on protecting its position as a global industrial power.
The Dutch government’s decision to pause its intervention was packaged as diplomatic courtesy. In reality, it was strategic realism. Europe cannot secure its supply chains by decree. China is too embedded, too indispensable, and too capable of punishing countermeasures.
But that does not mean Europe or the United States should stop safeguarding critical technologies. It means defensive tools must be paired with a strategy for managed engagement with China in the short to medium term. The alternative — an escalating cycle of confrontation and retaliation — exposes vulnerabilities on both sides of the Atlantic.
Supply chains are now instruments of statecraft, arenas where great-power rivalry plays out. The US may have architected the globalized system that created these interdependencies, but China now commands much of the leverage. Europe, wedged between two superpowers and entangled with both, must adapt to a world where autonomy cannot be asserted without acknowledging dependence.
Then came an extraordinary step: Nexperia’s Chinese subsidiary sent a directive telling employees to ignore orders from the Dutch headquarters and continue operations — an open assertion of Chinese authority over a firm regulated in Europe. By mid-November, the Dutch government abruptly suspended its intervention. Business resumed more or less as normal.
The Nexperia confrontation exposes a deeper reality. This is not just about semiconductor security — it is about ownership. Who controls the fabs? Who directs the boards? Who commands the flow of components and materials? And crucially, who can shut them off?
China can. And Nexperia shows exactly how.
Beijing used the same playbook a month earlier when it cut Europe out of parts of the rare earths supply chain after US tariffs on Chinese goods. Europe had imposed no tariffs but was punished anyway. The message was unmistakable: in an interlinked production world, China can hit where it hurts.
The US is also exposed. When Washington imposed sweeping tariffs globally, China responded by halting exports of critical minerals and magnets essential to the automotive, semiconductor, and aerospace sectors. The strategy worked. China paused its export controls for only a year — and in return the United States reduced tariffs and agreed to allow Chinese firms access to high-end chips.
China’s structural leverage goes far beyond semiconductors. It dominates production of battery precursors and a significant share of global pharmaceutical ingredients. It controls key nodes in solar, electric vehicle, and electronics supply chains. The US may lead in innovation, but China leads in capacity — and is quickly catching up on innovation too.
Nexperia is the latest reminder that the global industrial system is inseparable from China’s manufacturing power. Four decades of globalization built a world where efficiency outpaced resilience. Ownership sprawled across borders, supply chains stretched over continents, and production concentrated where scale was cheapest. The model delivered growth, low costs, and global reach — and produced vulnerabilities that cannot be unwound without immense economic pain.