China Accuses Netherlands of Prolonging Chip Dispute That Threatens Global Auto Production
- MM24 News Desk
- 1 day ago
- 2 min read
China has accused the Netherlands of "unilaterally" prolonging a semiconductor dispute after the Dutch government seized chipmaker Nexperia, warning that the action threatens to halt car factories across Europe and the UK. The confrontation has triggered Chinese export restrictions on vital automotive chips, with EU carmakers warning they are "days away" from production stoppages.
A major geopolitical confrontation over semiconductor control is now threatening to bring European automotive production to a standstill. China has publicly demanded that the Netherlands "stop interfering" in the affairs of seized chipmaker Nexperia, escalating a dispute that began when the Dutch government took control of the company at the end of September. The crisis has prompted China to halt exports of Nexperia products, cutting off a critical supply of chips used in essential car components from airbags to central locking systems.
“The Netherlands continues to act unilaterally without taking concrete steps to resolve the issue, which will inevitably exacerbate the adverse impact on the global semiconductor supply chain,” China’s ministry of commerce stated. “Neither China nor the global industry wishes to see this.” The Dutch government's seizure was driven by US security concerns about Nexperia's Chinese parent company, Wingtech Technology, and involved invoking a Cold War-era law to oust the company's chair.
The repercussions have been immediate and severe. With about 70% of Nexperia's chips packaged in China before global distribution, the export halt has created a critical shortage. Carmakers in the EU warned last week they were “days away” from production stoppages, according to reports. The European Commission is now engaged in urgent talks with Beijing, having made some progress in recent discussions but still facing significant restrictions on both chips and crucial rare earth minerals used in automotive manufacturing.
The dispute reveals the extreme fragility of global tech supply chains. A spokesperson for Wingtech issued a stark warning about the potential consequences, stating that if the matter is not resolved quickly, "hundreds of people in the Netherlands, Germany and the UK will lose their jobs with many more affected indirectly across Europe." The company argued that any attempt to create a "Nexperia-successor company" is doomed to fail because 80% of Nexperia’s back-end capacity is within mainland China.
This trade tension with the EU stands in sharp contrast to a truce struck between China and the US last week, in which China agreed to eliminate export controls on rare earth elements and end semiconductor "retaliation." The selective application of these trade measures suggests a strategic response by Beijing specifically targeting the Netherlands for its role in the seizure. The Dutch economic affairs ministry confirmed that talks are ongoing, stating they are working with "international partners to work toward a constructive solution."
For the global auto industry, already recovering from a cyber-attack that halted production at Jaguar Land Rover and cost the UK economy an estimated £1.9bn, this new crisis represents another severe shock. As the European Commission debriefs ambassadors and assesses the full impact, the situation underscores how national security actions in one country can rapidly cascade into a full-blown industrial emergency across continents, putting thousands of jobs and the stability of a major global industry at risk.
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