Dutch Economy Minister Vincent Karremans held talks on Tuesday with China’s Commerce Minister Wang Wentao, but the meeting ended without a breakthrough. The discussion came amid mounting pressure from Germany’s car industry, which warned that prolonged disruptions in chip supplies could soon lead to production shortages.
A Growing Diplomatic and Industrial Tension
The dispute began last month when the Dutch government seized control of Nexperia, citing national security concerns over the potential transfer of sensitive technology to its Chinese parent company, Wingtech Technology Co., which is listed on the Shanghai Stock Exchange.
China retaliated by blocking exports of Nexperia’s finished semiconductor products, most of which are packaged in China. The move sent alarm bells ringing among European car manufacturers who rely on Nexperia’s chips—basic but essential components used in vehicles and consumer electronics.
Minister Karremans said both sides had discussed “further steps toward reaching a solution acceptable to all parties,” but offered no details on a timeline or possible compromise.
The tone from Beijing was notably firmer. The Chinese Commerce Ministry, in a statement, said Wang had opposed the overextension of “national security” justifications, accusing the Netherlands of undermining global supply chain stability.
“Measures taken by the Dutch side regarding Nexperia Semiconductor have seriously affected the stability of global industrial and supply chains,” the ministry said. “China urges the Dutch side to act in the interest of maintaining security and stability in global trade.”
Mounting Pressure from European Carmakers
The uncertainty over Nexperia’s supply chain has caused unease in Germany, where the automotive sector remains highly dependent on steady access to semiconductors.
Germany’s powerful auto industry association, VDA, warned that a prolonged impasse could have immediate operational consequences.
“The situation could lead to considerable production restrictions in the near future, and possibly even to production stoppages if the interruption in the supply of Nexperia chips cannot be rectified in the short term,” said Hildegard Mueller, VDA President.
Industry analysts say that while Nexperia does not produce advanced chips, its components are manufactured in Europe and packaged in China — a delicate balance that makes either side difficult to replace quickly. Automakers have been drawing on existing inventories, but there are fears that stockpiles could run out within weeks if the dispute drags on.
Nexperia’s Internal Fracture and Strategic Impact
In a sign of internal strain, Nexperia’s operations in China have reportedly begun asserting independence from the company’s European management. According to local media reports, staff in China were told they could “reject external instructions,” reflecting a deepening rift between its dual operations.
The company’s chips are critical to maintaining production continuity across Europe’s car factories, which are already facing multiple headwinds — from the lingering effects of the global semiconductor shortage to U.S. import tariffs and China’s export curbs on rare earth metals.
A Broader Trade Flashpoint
The Nexperia standoff underscores growing geopolitical tensions over technology ownership and supply chain control — issues that have become central to the global economy’s post-pandemic recovery.
With the semiconductor industry sitting at the intersection of national security, trade, and industrial policy, analysts warn that the Nexperia case could become a test of how far Western governments are willing to go in tightening oversight of Chinese-linked technology assets.
For now, both sides appear entrenched. While the Netherlands insists its decision was based on security grounds, China maintains that such actions “weaponize trade regulation” and threaten the balance of global industrial cooperation.
As negotiations stall, Europe’s carmakers are watching nervously — caught between diplomatic tension and production risk in a dispute that could soon ripple across the continent’s manufacturing landscape.