European automakers expect chip shortages after Dutch intervene at tech firm Nexperia

The conflict surrounding the Nijmegen-based chipmaker Nexperia is affecting nearly all European car manufacturers, according to the European carmakers’ association ACEA. Last week, manufacturers and their suppliers were notified that Nexperia can no longer guarantee chip deliveries. The development follows reports that China placed export limits on the firm after the Dutch government and early court rulings allowed the Netherlands to force out Nexperia’s CEO, and to curb the influence of its Chinese parent company, Wingtech.

Nexperia ranks among the leading makers of basic chips used in vehicles and consumer electronics, commonly incorporated into electronic control units (ECUs) that regulate many functions in modern cars.

According to ACEA, European automakers have begun diversifying their chip purchases across multiple suppliers. However, adapting production to new providers takes time, often several months. The association warns that existing inventories of Nexperia chips could be depleted within weeks.

“We’ve unexpectedly entered a critical situation and now need quick, practical solutions from every country concerned,” said Sigrid de Vries, ACEA’s director general. She characterized the Nexperia dispute as a problem that extends beyond individual sectors.

Tensions between the Netherlands and China escalated after the caretaker Dutch government put Nijmegen-based chipmaker Nexperia, owned by the Chinese firm Wingtech, under curatorship, concerned that its Chinese owner might relocate activities out of the Netherlands or Europe. Subsequently, following a case brought by the company’s board and the Dutch state at Amsterdam’s Enterprise Chamber, Wingtech CEO Zhang Xuezheng was removed from his position at Nexperia.

The Dutch government also blocked the company from making significant changes to its assets, workforce, or intellectual property. In retaliation, the Chinese government announced earlier this week that Nexperia is temporarily barred from exporting chips from China. The company, which manufactures chips for automobiles and consumer electronics, operates a major factory in Dongguan.

It was also reported this week that U.S. officials had warned the Dutch government in June that Nexperia may lose their access to the American market if the Chinese CEO remained in his position. The U.S. government had already placed Wingtech on it's list of companies that are considered a security risk.

China is “strongly opposed” to the Dutch government’s takeover of Nexperia. According to China’s Ministry of Commerce, the acquisition is “in violation of contractual agreements and market principles.” The Chinese ministry said it will “strongly resist the Netherlands’ attempt to broaden national security and directly intervene in companies’ domestic affairs.”

Spokesperson He Yongqian added at a press conference that the decision breaches the spirit of contractual agreements and market principles and could severely damage the Dutch business climate, affecting both others and the Netherlands itself. The ministry stated that China will take all necessary steps to safeguard the legal rights and interests of Chinese businesses.