Key Points

• China has formally urged the Netherlands to “correct mistakes” regarding restrictions imposed on Nexperia, a Dutch semiconductor firm owned by Chinese company Wingtech.
• The call follows the Dutch government’s decision to force Nexperia to divest its majority stake in UK-based Newport Wafer Fab (NWF), citing national security concerns.
• Beijing views the actions as discriminatory and politically motivated, damaging fair competition in the semiconductor industry.
• Nexperia acquired an 86% stake in NWF in 2021 but was ordered to sell at least 25% initially, later increased to full divestment.
• China’s Commerce Ministry spokesperson He Yadong emphasised that the Netherlands should provide a “fair, just, and non-discriminatory business environment” for Chinese enterprises.
• The dispute highlights escalating tensions in global chip supply chains amid US-led export controls affecting allies like the Netherlands.
• Nexperia has expressed disappointment and is considering legal challenges against the UK decision.

**China’s Diplomatic Push on Netherlands Over Nexperia**

China has issued a strong diplomatic statement urging the Netherlands to rectify what it terms “mistakes” concerning the Chinese-owned semiconductor company Nexperia. The appeal centres on recent forced divestitures and restrictions imposed on the firm’s operations in Europe, particularly in the UK. As reported by Startup News FYI, China’s Commerce Ministry made the remarks amid broader concerns over discriminatory practices against Chinese businesses in the semiconductor sector.

What Triggered China’s Urging of the Netherlands?

The catalyst for China’s statement stems from the Dutch government’s involvement in Nexperia’s acquisition of Newport Wafer Fab (NWF), a key UK silicon carbide wafer manufacturer. In 2021, Nexperia, a subsidiary of China’s Wingtech Technology, acquired an 86% stake in NWF for approximately £17 million. However, UK authorities, advised by the Dutch government, intervened citing national security risks due to NWF’s strategic importance in power electronics for electric vehicles and renewable energy.

As detailed in Startup News FYI, the UK initially ordered Nexperia to divest 25% of its stake but later escalated this to a full divestment in 2024. Nexperia expressed deep disappointment, stating the decision lacked evidence of security threats and undermined the rule of law. The firm, headquartered in Nijmegen, Netherlands, employs over 13,000 people worldwide and is a major player in discrete semiconductors.

How Did China Respond to the Nexperia Divestment Order?

China’s Commerce Ministry spokesperson He Yadong directly addressed the issue, stating, “We urge the Dutch side to correct its mistakes as soon as possible and provide a fair, just, and non-discriminatory business environment for Chinese enterprises investing in the Netherlands.” This quote, as reported by Startup News FYI, underscores Beijing’s view that the actions violate principles of free trade and constitute economic coercion.

He Yadong further noted that such measures harm mutual trust and cooperation between China and the Netherlands, potentially disrupting global semiconductor supply chains. The ministry highlighted Nexperia’s contributions to innovation and employment in Europe, arguing that political interference distorts market competition.

What is Nexperia’s Role in the Global Semiconductor Industry?

Nexperia, founded in 2017 as a carve-out from NXP Semiconductors, specialises in power and signal management components, producing over 100 billion discrete devices annually. Owned by Wingtech since 2019, it operates factories in Europe, Asia, and the US. The Newport acquisition was aimed at expanding into silicon carbide (SiC) technology, critical for next-generation EVs and 5G infrastructure.

According to Startup News FYI, the Dutch government’s role emerged because Nexperia is based in the Netherlands, making it subject to national security reviews for overseas deals involving sensitive tech. China contends this scrutiny is selective, targeting Chinese firms disproportionately.

Why Did the UK Force Divestment from Newport Wafer Fab?

The UK’s Investment Security Unit, under the National Security and Investment Act 2021, reviewed the deal post-acquisition. Concerns centred on potential Chinese influence over SiC production, a dual-use technology with military applications. Nexperia was given multiple opportunities to provide assurances but ultimately ordered to sell its entire stake.

As per Startup News FYI, Nexperia stated, “We are extremely disappointed by the government’s decision to require divestment despite a lack of evidence of any national security threat.” The company is exploring appeals, emphasising its transparent operations and compliance with all regulations.

What Broader Context Links This to US-China Tech Wars?

This incident occurs against the backdrop of US export controls on advanced semiconductors to China, extended to allies via the Dutch government, which regulates ASML’s EUV lithography machines essential for chipmaking. China accuses the West of forming a “small yard, high fence” around critical technologies to suppress its rise.

Startup News FYI reports that Beijing has lodged formal protests with multiple European governments, warning of retaliatory measures if discrimination persists. The Nexperia case exemplifies how bilateral investment reviews are weaponised in geopolitical rivalries.

How Has Nexperia Reacted to the Restrictions?

Nexperia has maintained it poses no security risk, with Model Town operations fully integrated into Western supply chains. The firm invested £25 million in Newport post-acquisition, safeguarding 500 jobs. In a statement attributed via Startup News FYI, Nexperia affirmed, “We remain committed to the UK and will comply while pursuing all legal avenues.”

CEO Stéphane Rossignol previously noted the deal enhanced NWF’s competitiveness without compromising security, as production remained UK-based.

What Are the Implications for Dutch-Chinese Business Ties?

The Netherlands, home to ASML—the world’s sole EUV supplier—faces pressure from both US allies and China, its largest trading partner. China’s urging signals potential tit-for-tat measures, such as scrutiny of Dutch investments in China. Analysts warn of chilled investments, with Chinese firms redirecting to friendlier jurisdictions.

As analysed in Startup News FYI, this could escalate if unresolved, impacting bilateral trade worth €100 billion annually.

Will This Lead to Legal Challenges or Escalation?

Nexperia plans to challenge the UK order judicially, potentially reaching the Court of Appeal. China may raise the issue at WTO or bilateral talks. The Dutch government has not commented directly, but prior statements affirm alignment with allied security concerns.

Startup News FYI indicates monitoring for further developments, as the saga intertwines national security, trade, and technology sovereignty.

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