Subversion of security measures in Nexperia case highlights importance of resilient controls
On 11 February, the Enterprise Chamber of the Amsterdam Court of Appeal upheld the Dutch Minister of Economic Affairs’s decision to suspend the Chinese CEO of chip manufacturer Nexperia.
The decision follows the Dutch government’s takeover of Nexperia in September 2025 on national security grounds, a decision that effectively split the company’s Dutch and Chinese units.
Court documents released following the ruling reveal further information about the events leading to the Dutch Ministry of Economic Affair’s intervention in September 2025 [LINK].
Analysis:
The Nexperia case illustrates how interested parties can pursue aggressive and deceptive strategies to neutralise or circumvent protective security controls. The Dutch court found credible indications of efforts to create the appearance of compliance with government-mandated protective measures while simultaneously pursuing actions that undermined their intent. These included: revoking banking authorities from senior executives responsible for financial controls; pursuing negotiations with government officials while attempting to transfer intellectual property abroad; and attempting to remove or sideline management members who raised concerns about governance, risk exposure, and compliance.
Nexperia has effectively split into two parallel corporate entities based in the Netherlands and China. There is limited operational cooperation between the two parts and personnel on both sides have reportedly lost access to key technological infrastructure [LINK, LINK, LINK]. This de facto separation was unplanned, unlike deliberate strategic divestments by firms such as HSBC [LINK].
The dispute over Nexperia is causing disruption in the European manufacturing sector. Disruption caused by the conflict over Nexperia has affected the European automotive industry, where Nexperia previously provided approximately 40% of its required chips [LINK, LINK, LINK]. Some Nexperia customers are sourcing wafers from European Nexperia entities and shipping them to Chinese Nexperia facilities for final packaging, underlining how a lack of alternatives is forcing companies into inefficient workarounds that increase costs, compliance exposure, and delivery risk [LINK].
Implications:
European states and companies are increasingly conscious of the security and resilience implications of interdependence with the US and China. The Trump administration’s attitude towards Europe is underlining that this is not simply a choice of aligning with the US against China [LINK, LINK, LINK]. European concern over the US is likely to provide Chinese authorities and industry leaders with more leverage to exert economic and political leverage. This may include applying pressure on European governments through targeted intervention in critical supply chains or economic measures, such as the tariffs imposed on EU dairy products the day after the Nexperia court ruling [LINK].
Organisations need to act now on geopolitical risk mitigation and supply-chain resilience. The Nexperia case makes clear that geopolitical risk is not limited solely to companies working in sensitive areas, such as chip production; the disruption caused by the battle over Nexperia has cascaded across multiple industries. Court records indicate that a large Nexperia customer sought to reduce supply chain exposure to escalating US-China tensions by adopting a partial “China-free” sourcing strategy [LINK]. Efforts to assess and mitigate geopolitically driven supply chain risk will be increasingly common in future.
Recommendations:
Organisations operating in geopolitically sensitive sectors of the economy should conduct enhanced early-stage due diligence. This must extend beyond the immediate investor to cover affiliated entities and indirect commercial ties. Malicious actors can deliberately obfuscate risk through intermediary companies and other complex holding strategies, creating downstream exposure.
Protective security governance must be resilient to coercion, deception, and insider threat. Organisations should retain external experts to design protective security governance frameworks resilient against coercion, deception, and regulatory gaming by hostile or bad-faith investors and by company insiders. Early detection of behavioural and organisational threat signals indicating attempts to simulate compliance or undermine protective measures is key.
Organisations should assess risks to resilience from dependence on cross-jurisdictional infrastructure. Operational continuity in companies with operations and ownership in multiple jurisdictions depends on shared technological infrastructure. Loss of access to foreign technology is a key operational risk in a period of enhanced geopolitical competition. Organisations should map critical technology dependencies and implement contingency measures to ensure operational resilience in the event of geopolitically driven disruption.
Timeline of Events:
14 June 2024
Nexperia submitted a memorandum to the Dutch Ministry of Economic Affairs proposing a Supervisory Board and other protective security measures designed to address national security concerns [LINK].
August - October 2024
Internal communications involving the Chinese CEO of Nexperia B.V., Zhang Xuezheng, indicated resistance to these protective security measures on the basis of impact on shareholder control. By October, Nexperia’s Chief Legal Officer was instructed to re-negotiate provisions such as the removal of veto rights [LINK].
December 2024
Nexperia’s parent company, Wingtech, was placed on the US Entity List [LINK]. The Dutch Ministry of Economic Affairs reiterated that the protective security measures were of critical importance [LINK].
January - February 2025
To address the liquidity needs of Wingtech’s Chinese-based subsidiary and a wafer supplier to Nexperia, Wingskysemi, Nexperia signed a ‘prepayment agreement’ with Wingskysemi and discussed acquiring Wingskysemi. Internal discussions noted concerns regarding the storage and financial risks associated with the inventory increase [LINK].
March 2025
Nexperia cancelled the acquisition of Wingskysemi after due diligence indicated it had negative equity value. Nexperia’s Chief Legal Officer informed the Dutch Ministry of Economic Affairs of internal resistance to the protective security measures and the unwillingness to provide unconditional guarantees regarding its Dutch identity [LINK].
May - June 2025
Zhang Xuezheng prohibited direct dialogue with US authorities after Nexperia was threatened with secondary sanctions because of its Chinese ownership. Internal communications indicated that plans were made to address this risk and instructions were issued to transfer Nexperia intellectual property from US servers to Chinese servers [LINK].
July 2025
Zhang Xuezheng met with the Dutch Minister of Economic Affairs to propose a partial diversification and voiced an intent to introduce protective security measures. Internal meetings discussed a Wingskysemi “second brand concept”, proposing that Wingskysemi act as a distributor for Nexperia in China. European management opposed this idea due to compliance and intellectual property risks [LINK].
September 2025
On 4 September, Zhang Xuezheng instructed the withdrawal of banking powers from the European Chief Financial Officer and Treasurer, reassigning them to Chinese individuals. This decision was strongly opposed by European Nexperia executives [LINK].
On 11 September, key European executives, including the Chief Legal Officer, Chief Financial Officer, and the Chief Operating Officer, were dismissed for divergence from the Board’s strategic vision [LINK].
On 30 September, the US published the “50% rule”, subjecting Nexperia to US export controls. On the same day, the Dutch Minister invoked the Availability of Goods Act, ordering Nexperia to retain its business and production means and suspending Zhang Xuezheng [LINK]
1 October 2025
Nexperia executives filed a claim in the Dutch courts requesting an investigation and the imposition of interim controls.
Access to Chinese IT infrastructure for Nexperia workers outside of China was blocked. Chinese teams were reportedly instructed to download important data from SAP, Workday, Outlook, and OneDrive to local storage facilities [LINK].
4 October
The Chinese Ministry of Commerce issued an export control notice, preventing Nexperia from exporting chips from China [LINK, LINK].
13 October
Wingtech responded on its WeChat account, accusing the Dutch government of ‘geopolitical bias’ and indicating it would pursue the case in the courts.
14 October
Nexperia released a statement covering the removal of Nexperia’s Chinese CEO and the Dutch government’s intervention under the Goods Availability Act [LINK].
18 October
The South China Morning Post reported that Nexperia had shut Chinese employees out of work accounts and halted their salaries [LINK].
19 October
Nexperia’s Chinese unit told staff to disregard instructions from the company leadership in The Netherlands [LINK].
20 October
Nexperia’s Chinese unit claimed in a WeChat post to be an independent company.
22 October
Nexperia reportedly disavowed chips produced in the company’s Chinese manufacturing sites, stating that it could no longer guarantee production at those factories.
23 October
Nexperia’s Chinese business unit posted a statement on WeChat accusing the Dutch headquarters of spreading “information [...] that is inconsistent with the facts” and disregarding the rights of “Nexperia China entities” [LINK, LINK].
Reuters reported that Nexperia’s Chinese unit had resumed deliveries to domestic distributors, with transactions now being conducted in yuan [LINK].
An article on China’s English-language Global Times website used the formulations ‘Nexperia Netherlands’ and ‘Nexperia China’ when referring to the company.
11 February 2026
The Enterprise Chamber of the Amsterdam Court of Appeal ordered a formal investigation into Nexperia and upheld the suspension of Zhang Xuezheng LINK, LINK, LINK].
12 February 2026
Wingtech announced on its WeChat account that the company expressed profound disappointment and strong dissatisfaction with this ruling, calling it self-contradictory and logically flawed [LINK].
A spokesperson for the Chinese Ministry of Commerce stated that the root cause of the Nexperia issue was the improper administrative intervention of the Dutch side in the operations of businesses [LINK].
The Chinese Ministry of Commerce announced duties on certain dairy products imported from the EU starting on 13 February 2026 [LINK].
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