A court upheld an October decision to suspend the company’s Chinese CEO Zhang Xuezheng.
Nexperia’s Chinese owner Wingtech was unable to sway the Amsterdam Court of Appeals and regain control of the Dutch chipmaker that plays a vital role in the global automotive industry.
In an translated press release published yesterday (11 February), the court’s enterprise chamber instead ordered an investigation into Nexperia, citing “well-founded reasons to doubt a proper policy and proper course of affairs” at the company.
The court also upheld an October decision to suspend its Chinese CEO Zhang Xuezheng and hand control off to EU-based directors. Xuezheng shares were handed over to a trust, but he still retained economic benefits.
Nexperia’s seizure began on 30 September last year, when the Dutch government invoked the rarely used Goods Availability Act, pointing to “serious governance shortcomings” at the company.
The Netherlands believed that alleged mismanagement at Nexperia posed a “threat” to Europe’s semiconductor capabilities.
Responding to the seizure, China halted Nexperia chip exports in early October, which resulted in a disruption affecting nearly three-quarters of the company’s output. On 9 November, however, the export ban was lifted.
In a statement issued that month, the Dutch government said that concerns around Nexperia stemmed from the now-suspended CEO who took part in the “improper transfer of product assets, funds, technology and knowledge to a foreign entity”.
Nexperia’s Chinese and European arms have stopped collaborating since the seizure, and despite signs of easing tensions in November, issues between the parties still persist.
The Dutch company stopped shipping silicon wafers to its Chinese subsidiary last year claiming the local unit refused to make payments. According to the Financial Times, customers are now purchasing wafers from the European unit to the Chinese unit for assembly themselves. Nexperia supplies its chips to the likes of Volvo, JLR and Volkswagen.
In its order following the public hearing of 14 January, the Dutch court found “indications that careless action was taken with a conflicting interest” at Nexperia.
It said that Xuezheng changed company strategies without consulting other board members. In a hearing last month, Nexperia’s lawyers claimed that Zhang was moving equipment to China and used its assets for Wing Systems, a different company he owned.
Responding to yesterday’s orders, Nexperia said it welcomed the ruling and commits to fully complying with the investigation.
“Despite the challenging situation, our underlying business continues to be healthy and resilient and we remain committed to being a strong, reliable partner for all our stakeholders including customers,” it said.
The Dutch-headquartered Nexperia – an offshoot of NXP – was acquired by China’s contract manufacturing giant Wingtech Technology in 2018.
Last year’s takeover has caused a severe strain in the relationship between parent company Wingtech and Nexperia, who have accused each other of disrupting operations and destabilising business.
In 2024, the US government added Wingtech to its Entity List – a designation given to companies that could pose a risk to the country’s national security. In 2022, the UK government ordered Wingtech-owned Nexperia to undo its acquisition of the Newport Wafer Fab, citing a national security risk.
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