The Dutch government took control of Nexperia B.V. on October 12 in a highly unusual move designed to retain access to the company’s products. The move has sparked the Chinese government to halt all exports of Nexperia from China, where most of the company’s semiconductor products are manufactured. Automotive manufacturers have warned that production impacts are likely if the two countries cannot reach an agreement on the company.
The Dutch government’s concern with retaining access to Nexperia’s products stems from a recent decision by the U.S. Commerce Department to include subsidiaries of blacklisted companies into its ongoing sanctions against China. The expansion affected companies on both the U.S. entity list, comprised of companies accused of action contrary to U.S. national security, as well companies on the military end-user list, comprised of companies accused of procuring items for foreign militaries. The U.S. placed Nexperia’s parent company, Wingtech Technology Co., on the entity list in December 2024. The U.S. government warned the Dutch government in June 2025 that Nexperia B.V. must replace its CEO Zhang Xuezheng to avoid being added to the expanded U.S. entity list. The recent expansion to include subsidiaries on September 29 extended the sanctions to Nexperia and prompted the Dutch government to intervene with an order to take control of the company and remove Xuezheng from his position.
China restricts exports of Nexperia products
Following the seizure of the company, the Chinese government responded by placing export restrictions to prevent Nexperia products from exiting China. Further, Xuezheng has claimed that Nexperia’s factory in Dongguan, Guangdong, China, will act independently of its Dutch-parent. The Dongguan factory suspended shipments to all its external distributors following China’s export ban on October 4. Shipments to local Chinese distributors continue, but orders must be settled in Chinese Yuan (CNY) instead of foreign currencies. The Dongguan factory manufactures small-signal assembled products used in vehicle control circuits and lighting systems, high-runner products, medium-power surface mount device packages (SMDs), dual flat no-lead packages (DFNs) and wafer scale options. Nexperia has warned its customers not to purchase products from its Chinese-subsidiary as it cannot guarantee product quality.
European automakers most vulnerable to production disruptions
Automakers and electronics manufacturers are bracing for impacts following Nexperia’s announcement that it can no longer guarantee delivery of chips to its customers. European manufacturers are at disproportionate risk as the automotive and electronics industries are already reeling under 15% import tariffs in the U.S. and China’s tightening export restrictions on rare-earth minerals. Several contract manufacturers are reportedly pivoting to ON Semiconductor Corporation and Diodes Inc. for compatible automotive-grade and power discrete options to support their operations. While shipments of Nexperia’s MOSFETs and small-signal products from the Dongguan factory may reach Europe through unofficial trade channels, companies are also racing to secure supplies through other trusted, less-risky sources.
Several automotive companies raised concerns that production would be interrupted by the measure. Mercedes-Benz, Bayerische Motoren Werke AG (BMW), and Stellantis all reported that production could be impacted by disrupted semiconductor shipments from Nexperia. Volkswagen reported that it had enough supply to continue production for one week but confirmed that several of its suppliers are reliant on Nexperia, and production could be impacted if the restrictions are prolonged. Electronics companies are also facing impacts.
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