Europe's chip crisis: The Nexperia case and the road ahead

Since 2023, Nexperia had been in discussions with the Dutch Ministry of Economic Affairs to secure its recognition as a Dutch semiconductor company. Agreements were reached on the protection of information, know-how and intellectual property. Additional commitments related to restructuring the company's corporate organisation. According to the Ministry, these agreements were not being honoured, and concerns arose that knowledge, expertise and production capacity would be transferred to China. This prompted the then-Minister of Economic Affairs to assert de facto control of Nexperia on 30 September 2025 based on the “law on availability of goods”. The decision led to heightened tensions between the Dutch and Chinese governments. In retaliation, the Chinese government banned exports from Nexperia's Chinese affiliates and subcontractors to the Netherlands. Nexperia depended on these companies for the assembly and testing of its products in the Netherlands. These developments ultimately resulted in a chip shortage and a production crisis across the global automotive industry.

Prior to the Minister's intervention, Nexperia's other board members had considered bringing proceedings before the Enterprise Chamber, suspecting the CEO and founder of the parent company of mismanagement. They alleged that he had been favouring affiliated Chinese companies at the expense of Nexperia. The day after the Minister's order, the board members filed a petition for an inquiry with the Enterprise Chamber. That same day, the Enterprise Chamber granted immediate interim measures, including the suspension of the CEO, the appointment of an independent director, and the transfer of the shares held by Nexperia's sole Chinese shareholder into administration.

A hearing took place and on 11 February the Enterprise Chamber delivered its ruling. The court found that there were reasonable grounds to doubt the correctness of Nexperia’s policies or course of actions. It ordered an investigation into Nexperia,  focussing on how Nexperia has managed conflicts of interest, decision-making within the board, its dealings with the Dutch government, and internal disputes between Nexperia and its Chinese affiliates. The interim measures will remain in place for the time being.

The Nexperia crisis has brought a wider issue into sharp focus: the resilience of the supply chain remains fragile in the automotive industry. As a result, a broader debate is underway across Europe, with growing calls for stricter rules to incentivise the production of components, such as chips, within Europe, which would enhance strategic autonomy and supply-chain resilience. 

Other major economies are already pursuing policies that encourage car manufacturers to use domestically produced parts in their vehicles. At a time when geopolitical tensions are running high, this is a matter that warrants serious consideration. The potential consequences of over-reliance on external suppliers have now become abundantly clear. Finding a solution, however, is far from straightforward, given that protectionist measures risk provoking countermeasures. At the same time, it must be noted that international trade has brought considerable benefits to Europe. 

The challenge for European policy makers is to strike a balance between safeguarding strategic autonomy on the one hand and preserving the advantages of international cooperation on the other.