A crisis at chipmaker Nexperia sent automakers scrambling. Here's what
to know
[November 10, 2025] KELVIN
CHAN and CHAN HO-HIM
A battle for control of a little-known chipmaker has threatened global
auto production by choking off the semiconductor supply chain, though
there are signs the crisis is inching toward a resolution.
The power struggle over Nexperia, a Chinese-owned Dutch semiconductor
maker, highlights how technology supply chain vulnerabilities are
squeezing auto makers, most notably forcing Honda to halt production at
a Mexican factory making its popular HR-V crossover for North American
markets. It also exposes how Europe is caught in the middle of the wider
geopolitical showdown between Washington and Beijing.
Here's a look at the dispute:
A surprise move
The turmoil erupted into public view in mid-October, when the Dutch
government announced it had invoked a rarely used World War II-era law
to take effective control of Nexperia weeks earlier.
The Dutch ministry of economic affairs said it took action because of
national security concerns. Officials said they intervened because of
“serious governance shortcomings” at Nexperia, asserting control to
prevent the loss of crucial tech know-how that could threaten Europe's
economic security.
Nexperia’s Chinese owner Wingtech Technology, a partially state-owned
company, is at the heart of the dispute. Amid the boardroom battle, a
Dutch court granted the ministry's request to oust Nexperia's Chinese
CEO Zhang Xuezheng. American officials told the Dutch government he
would have to be replaced to avoid trade restrictions, according to a
court filing.
What is Nexperia?
Nexperia makes simple semiconductors such as switches and logic chips.
The auto industry — one of Nexperia's biggest markets — uses its chips
for numerous functions, such as adaptive LED headlight controllers,
electric vehicle battery management systems and anti-lock brakes.
Headquartered in the Dutch city of Nijmegen, Nexperia was spun off from
Philips Semiconductors two decades ago. It was eventually purchased by
China's Wingtech Technology in 2018 for $3.6 billion.
Nexperia has wafer fabrication plants in Britain and Germany. It
operates an assembly and testing center in China's southern
manufacturing heartland of Guangdong — which accounts for around 70% of
its end-product capacity — and similar centers in the Philippines and
Malaysia.
Geopolitics
The dispute is part of the broader struggle between the U.S. and China
over tech supremacy, which has left Europe caught in the middle.
It stems from Washington’s decision late last year to place Wingtech on
its “entity list," which subjects companies to export controls because
of national security risks. In late September, the U.S. expanded that
list to Wingtech’s subsidiaries, including Nexperia, pressuring allies
to follow suit.
After the Dutch government asserted control of Nexperia, Beijing
responded soon after, blocking the export of Nexperia chips from its
assembly plant in the Chinese city of Dongguan. It blamed the
Netherlands for “turmoil and chaos” in the chip supply chain.
There were signs of hope following last month's high-profile meeting
between U.S. President Donald Trump and Chinese leader Xi Jinping, when
the White House said Beijing would ease the export ban as part of a
U.S.-China trade truce.
Despite Beijing also confirming exports would be allowed to resume,
Nexperia’s Chinese unit said headquarters suspended shipments of wafers
used to make chips to its Chinese factory, potentially crimping its
ability to deliver finished products.
[to top of second column] |
 Nexperia’s head office hit back in a
statement Wednesday, saying the Chinese unit refused to pay for the
wafers and accused it of “ignoring the lawful instructions" from its
global management team. The company said it can’t guarantee the
quality of any chips delivered from its China plant since Oct. 13.
Auto disruption
Modern automobiles rely on so-called discrete chips made by
companies like Nexperia, which, unlike more advanced
microprocessors, perform a single function. Leaders at big carmakers
spelled out their worries in the latest round of earnings calls,
saying that finding a replacement for Nexperia at scale in the short
term will be difficult.
“While Nexperia makes up only about 5% of the automotive silicon
discrete market in term of revenue, its share is much higher in
terms of discrete chip volume,” S&P Global Mobility analysts wrote
in a recent note.
Nexperia’s parts are widely used across vehicle systems — often
dozens to hundreds per vehicle — and carmakers in North America,
Japan and South Korea are at risk, they added.
“It’s an industrywide issue. A quick breakthrough is really
necessary to avoid fourth quarter production losses for the entire
industry,” Ford CEO Jim Farley said.
General Motors CEO Mary Barra warned that production could be hit.
The company has “teams working around the clock with our supply
chain partners to minimize possible disruptions,” she said.
Nissan CEO Ivan Espinosa told CNBC that the company is setting aside
a 25 billion yen ($163 million) provision for supply risks, in part
to “absorb” the impact from the Nexperia crisis on production.
Mercedes-Benz is “scurrying around the world to look for
alternatives,” CEO Ola Kallenius said. The European Automobile
Manufacturers’ Association said members including BMW, Renault,
Volkswagen and Volvo have been forced to use their reserve
stockpiles of chips and warned of assembly line stoppages if they
run out.
Resolution
The European Union’s trade commissioner, Maros Sefcovic, on Saturday
noted “encouraging progress," writing on X that China's Commerce
Ministry had confirmed “further simplification” of export procedures
for Nexperia chips to the EU and global customers.
In Beijing, the Commerce Ministry also said Saturday that it agreed
to a Dutch request to send representatives to China for
"consultations."
But it noted that the Netherlands had not taken any concrete actions
yet to restore the global semiconductor supply chain since the Dutch
government said days earlier it would take “appropriate steps on our
part where necessary."
Economics Affairs Minister Vincent Karremans had said in that
statement that "the Netherlands trusts that the supply of chips from
China to Europe and the rest of the world will reach Nexperia’s
customers over the coming days.”
Honda has received word that Nexperia's shipments from China have
resumed, Executive Vice President Noriya Kaihara told reporters
Friday. He said the Japanese automaker expects to resume production
during the week of Nov. 21 at its plant in Celaya, Mexico, which can
make up to 200,000 vehicles a year.
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AP Business Writer Yuri Kageyama in Tokyo contributed to this
report.
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