【Text by Observer Net, Pan Yuchen, Editor by Gao Xin】On October 19, Nexperia China Company released an open letter titled "Nexperia China to All Employees" through its WeChat official account. The letter emphasized that Nexperia's domestic companies are Chinese enterprises rooted in China and with a global strategy, and must comply with Chinese laws and operate in a legal and compliant manner. At any time, Nexperia's domestic companies are independent Chinese enterprises making their own business decisions. All employees should continue to follow the work instructions of Nexperia's domestic companies. Employees have the right to refuse to execute any external instructions not approved by the legal representative of Nexperia's domestic companies (even if transmitted through Outlook, Teams, etc.), which will not constitute a violation of work discipline or laws and regulations.

Nexperia China also emphasized that all operations of Nexperia's domestic entities and employee salaries and benefits are normal, and all work is proceeding in an orderly manner. The board of directors and management have always been fully committed to ensuring the smooth operation of the company and will not allow external forces to affect the company's operations or harm employee interests. Colleagues on the Nexperia domestic team have labor relationships with the domestic company, and employees' wages, bonuses, and other benefits will continue to be paid by Nexperia's domestic company rather than the Nexperia Netherlands entity. Nexperia's domestic company has the ability, responsibility, and willingness to safeguard the rights and interests of all employees and continue to create a safe working environment.

"Nexperia China to All Employees" Nexperia Semiconductor

According to a report by the Financial Times, on October 20, the Dutch Ministry of Economic Affairs stated that Dutch Minister of Economic Affairs Vincent Karremans is expected to meet with Chinese Minister of Commerce Wang Wen Tao in the coming days to resolve the dispute surrounding Nexperia Semiconductor.

The background of the dispute

According to Reuters, Karremans said on September 19 during an interview with the Dutch TV program "Buitenhof" that the purpose of this action was to prevent Nexperia Semiconductor's CEO Zhang Xuezhen from transferring business and intellectual property out of Europe, rather than what the Chinese side believes, "the Netherlands is colluding with the United States to intervene in Nexperia Semiconductor affairs."

Previously, on September 29, the U.S. Bureau of Industry and Security (BIS) announced that it would expand U.S. export control restrictions to entities that are owned by one or more entities on the U.S. Entity List with at least 50% equity. The parent company of Nexperia, Wenxiang Technology, was added to the BIS Entity List in December 2024.

Subsequently, on September 30, the Dutch Ministry of Economic Affairs and Climate Policy required Wenxiang Technology's Nexperia and all its subsidiaries, branches, offices, and other 30 global entities to refrain from making any adjustments to their assets, intellectual property, business, and personnel, with an effective period of one year.

On October 1, the Chief Legal Officer, Chief Financial Officer, and Chief Operating Officer of Nexperia submitted an emergency request to the Dutch enterprise court to initiate an investigation into the company and take interim measures.

On October 7, the Dutch enterprise court ruled to suspend Zhang Xuezhen's positions as non-executive director of Nexperia Semiconductor Holding and executive director of Nexperia Semiconductor, and appointed a foreign individual designated by the Dutch enterprise court, independent of Nexperia, as a non-executive director of Nexperia Semiconductor Holding and Nexperia Semiconductor, who would have decisive voting rights and the authority to independently represent Nexperia Semiconductor Holding and Nexperia Semiconductor. Additionally, the court ruled that all shares of Nexperia Semiconductor (minus one share) would be entrusted to the appointed person.

Nexperia Semiconductor Visual China

In this context, on October 4, the Chinese Ministry of Commerce issued an export control notice prohibiting Nexperia China and its subcontractors from exporting specific finished components and sub-components produced in China; on October 9, the Ministry of Commerce issued another notice on the export control of certain rare earth items and related technologies abroad.

On October 14, Karremans wrote in a letter to the Dutch House of Representatives that Zhang Xuezhen had improperly transferred the production capacity, financial resources, and intellectual property of Nexperia Semiconductor to foreign entities that he controlled and were unrelated to Nexperia Semiconductor, posing a serious threat to the continuity of Nexperia Semiconductor, the protection of key technical knowledge, and the production and development capabilities of the Netherlands and Europe. He emphasized that the decision to take over Nexperia was not influenced by any other country, but rather out of concern for the survival of Nexperia Semiconductor.

According to Dutch media NRC, the latest court records show that Zhang Xuezhen had previously requested Nexperia to place orders with Shanghai Dingtaijiangxin Technology Co., Ltd., which was established by Shanghai Wenti Xiaxia Enterprise Development Co., Ltd., controlled by Zhang Xuezhen, in Shanghai in October 2020, an 12-inch automotive-grade wafer factory, which started construction in January 2021 and began operations in 2023. However, Nexperia only needed to purchase 70 million to 80 million U.S. dollars worth of wafers from Dingtaijiangxin in 2025, while the actual order value exceeded 200 million U.S. dollars, with the excess funds used to maintain the operations of Dingtaijiangxin.

Premeditated

However, according to NRC, in fact, soon after Wenxiang Technology fully acquired Nexperia Semiconductor, the Netherlands-based Nexperia company had already considered "de-Chineseization."

In December 2019, Wenxiang Technology completed the acquisition of 79.98% of Nexperia Semiconductor's shares for 26.85 billion yuan, gradually achieving full ownership, making it the largest semiconductor acquisition in Chinese history.

In March 2020, then CEO of Nexperia Semiconductor Frans Scheper retired early; Zhang Xuezhen, the founder of Wenxiang Technology and chairman of Nexperia Semiconductor's board, took over as CEO.

According to NRC, the Netherlands-based Nexperia company contacted the Dutch Ministry of Economic Affairs as early as the end of 2023 to seek political assistance, and both parties agreed to reduce the influence of the Chinese parent company Wenxiang Technology on Nexperia, and planned to introduce new Western shareholders to eventually achieve the company's independent listing.

To this end, Nexperia Semiconductor planned to establish a supervisory board to supervise the Dutch company, and management matters required approval from the supervisory board before implementation. Subsequently, Nexperia Semiconductor also proposed three candidates for the supervisory board members to be designated by the Dutch Ministry of Economic Affairs.

In September 2024, Wenxiang Technology, the parent company of Nexperia Semiconductor, rejected the above requirements, and Nexperia Netherlands had to temporarily abandon the plan. Until recently, it forcibly seized control with the help of the Dutch Ministry of Economic Affairs.

Wenxiang Technology Visual China

After the Dutch government took over Nexperia Semiconductor, on October 13, Wenxiang Technology released a statement titled "The firm position of Wenxiang Technology on the Dutch government's interference in the operation of Nexperia Semiconductor under its umbrella," stating that the Dutch government implemented a global operational freeze on Nexperia Semiconductor under the pretext of "national security" without any basis, which was excessive intervention based on geopolitical bias, not based on factual risk assessment. This act seriously violated the EU's consistent advocacy of market economy, fair competition, and international trade rules. Wenxiang Technology strongly protested against this discriminatory treatment targeting Chinese enterprises.

Wenxiang Technology also emphasized that some foreign management personnel of Nexperia Semiconductor attempted to change the equity structure of Nexperia Semiconductor through legal procedures, and their demands were highly aligned with the Dutch government's instructions. Essentially, they were using political pressure to deprive shareholders of their rights and undermine the company's legitimate governance structure. The company condemned such actions, which appear to be about compliance but are actually about seizing power.

Wenxiang Technology stated that it would never yield to external political pressure, and has initiated all legal and diplomatic channels to demand that the Dutch government immediately revoke the erroneous instructions, stop the systemic discrimination against Chinese enterprises, and protect the openness and cooperation of the global semiconductor industry chain.

"Chip shortage" resurfaces

Meanwhile, as the dispute over Nexperia Semiconductor continued to escalate, the global automotive supply chain began to face another round of "chip shortage" after the pandemic.

Nexperia Semiconductor is a leading global semiconductor company. According to XINMO Research data, in 2024, Nexperia Semiconductor ranked third in global revenue for power discrete devices and remained first in domestic power semiconductors. Among them, the shipment volume of small signal diodes and transistors was first globally, logic ICs were second globally, ESD protection devices were first globally, small signal MOSFETs were first globally, and car-rated Power MOS were second globally.

Among these, the automotive industry remains the main source of revenue for the company. In the first half of this year, revenue from the automotive industry accounted for nearly 60%. Major automobile manufacturers such as Volkswagen, BMW, and Mercedes-Benz are its customers.

According to a report by the Financial Times, although Nexperia Semiconductor produces semiconductor wafers in Germany and the UK, 80% of its final products are processed in China. With the Chinese Ministry of Commerce banning Nexperia China from exporting specific finished components and sub-components produced in China, the entire automotive supply chain has been affected.

Nexperia Semiconductor UK Factory Visual China

On October 16, the European Automobile Manufacturers Association (ACEA) issued a statement expressing concerns about the Nexperia Semiconductor dispute. ACEA stated that although the automotive industry has already purchased similar chips from other suppliers, the new supplier certification and capacity increase for specific components will take several months, while the current inventory of Nexperia Semiconductor chips can only last for a few weeks. Some European and American automobile manufacturers are urgently re-planning their supply chains due to the imminent chip shortage.

It is worth noting that according to Wenxiang Technology's semi-annual report this year, in the company's main regional markets, the revenue proportion from the Chinese market exceeded 48%, while the European market was less than 22%. Currently, 70% of Nexperia Semiconductor's production capacity is located in China, and Wenxiang Technology stated that the Chinese region is carrying out "independent self-rescue," connecting the domestic supply chain to ensure customer needs.

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