In a dramatic escalation of corporate governance tensions, Nexperia China has instructed its employees to prioritize directives from local management over orders from the Dutch headquarters. This move signals a significant pushback against Dutch oversight following a controversial seizure of the company’s management by Dutch authorities, citing national security concerns.
The announcement, shared via an internal letter over the weekend, underscores the growing divide between the Dutch parent company and its operations in China. Nexperia, owned by China-based Wingtech Technology, confirmed through social media that all operations in China—including its Dongguan plant and offices in Shanghai, Beijing, Shenzhen, and Wuxi—are now managed independently by local teams. This operational autonomy is further emphasized by the fact that employees at these sites are compensated by the Chinese entity, effectively distancing them from the Dutch headquarters.
Dutch Seizure Faces Legal Limits
The Dutch government’s intervention comes under the auspices of the Goods Availability Act, an emergency law that permits state control over companies deemed essential to national security. However, this measure is limited in scope, affecting only the parent company and its European operations, while leaving subsidiaries in mainland China largely untouched. This legal limitation significantly curtails the practical impact of the Dutch takeover.
As part of the intervention, Dutch authorities have removed CEO Zhang Xuezheng from his position and imposed restrictions on certain corporate actions, including the relocation of units or the termination of executives, for a period of up to one year. Nevertheless, the lack of enforcement power over Nexperia China creates a jurisdictional deadlock that complicates the situation further.
Export Controls Intensify the Stand-Off
Adding another layer of complexity, China’s Ministry of Commerce has introduced export restrictions on specific finished components produced domestically. This policy effectively blocks the Dutch administration from exerting any meaningful influence over operations in China, where approximately 70% of Nexperia’s products are assembled at the Dongguan facility. As a result, despite having legal authority over the European parent company, Dutch authorities are unable to redirect operations or access product flows from China.
The standoff has evolved into a delicate balancing act of geopolitics and corporate governance, with government-to-government negotiations between the Netherlands and China now in progress.
Rivals Eye Supply Opportunities
The uncertainty surrounding Nexperia’s operational status has opened a window of opportunity for competitors in the semiconductor space. Companies such as Infineon, ON Semiconductor, STMicroelectronics, and Rohm are likely to target customers concerned about potential supply disruptions, especially for critical automotive-grade components.
The Dongguan plant is responsible for processing over 50 billion pieces annually, focusing on high-demand, medium-power SMD packages, DFN formats, and wafer-scale options. Competitors are expected to prioritize the production of pin-compatible replacement components for diodes, transistors, and other discrete families that may be affected by the ongoing export constraints.
Electronics distributors are also bracing for potential demand spikes, preparing inventory buffers to accommodate automobile and industrial equipment manufacturers seeking alternative suppliers amid this period of geopolitical uncertainty.
