Lawyers for Dutch semiconductor maker Nexperia and its Chinese owners, Wingtech, faced off in an Amsterdam courtroom on Wednesday in a corporate mismanagement case that has sent shockwaves through the global auto industry. The hearing at the enterprise chamber of the Amsterdam Court of Appeal will decide whether judges should launch an investigation into alleged mismanagement at Nexperia. No immediate decision was expected.
The power struggle became public in October when the Dutch government said it had effectively seized control of Nexperia since late September on national security grounds. Chinese CEO Zhang Xuezheng, also founder of Wingtech, was replaced amid claims of mismanagement and fears of intellectual property rights being transferred. Lawyers for Zhang and Wingtech portrayed him as a successful businessman navigating geopolitical tensions and urged the court not to order an investigation, saying Wingtech was blindsided by the Dutch government's move.
Nexperia's lawyer, Jeroen van der Schriek, told the three-judge panel that the behaviour of Wingtech and Hong Kong-based holding company Yuching since October 'makes it clear that they are willing to subordinate Nexperia’s interests to other interests.' Tensions escalated in October when Beijing temporarily blocked the export of Nexperia chips from its Chinese plant, causing global carmakers to scramble for supplies. The ban was lifted after a meeting between US President Donald Trump and Chinese leader Xi Jinping.
The Dutch government relinquished control in November as a 'show of goodwill,' but a standoff between Nexperia's Dutch headquarters and its Chinese unit continued, fuelling supply chain concerns. The Chinese arm said headquarters interrupted wafer shipments to its factory, impacting production, while headquarters accused the Chinese unit of ignoring instructions. Car manufacturers including Honda halted production of some cars, and Mercedes-Benz scrambled for alternatives.
In late December, China's Ministry of Commerce demanded the Netherlands correct its 'mistakes,' blaming the Dutch for causing a global chip supply chain crisis. Nexperia was spun off from Philips Semiconductors two decades ago and purchased by Wingtech in 2018. In 2023, the British government blocked Nexperia's bid to acquire Wales-based chipmaker Newport Wafer Fab, citing national security risks.
