Nexperia: Is the EU Abandoning Semiconductor Sovereignty? 

This article was exclusively written for The European Sting by one of our passionate readers, Mr Sean Brown, a law graduate and a former economic development adviser who worked in Brussels for several years. The opinions expressed within reflect only the writer’s views and not necessarily The European Sting’s position on the issue.

The Dutch government’s decision to abandon plans to take control of Nexperia—a company headquartered in the Netherlands but owned by China—sends a troubling signal regarding Europe’s resolve to defend its semiconductor sovereignty. Taking control of Nexperia could have marked a turning point for Europe’s industrial strategy. Instead, the Netherlands and the EU appear to be accepting growing Chinese dominance, raising yet more questions about European commitment to its own tech future.  

Europe likes to say it has learned the lessons of dependency. After the energy shock of 2022, after the humiliating chip shortages that paralysed its automotive industry, after years of speeches about “strategic autonomy”, the EU insists it is finally ready to defend its technological future. Indeed, in her 2025 State of the Union speech in Strasbourg,  European Commission President Ursula von Der Leyen urged Europe to “keep up the speed” and said that, “when it comes to digital and clean tech”, the EU must be “faster, smarter and more European”. The Nexperia affair has, however, thrown much of this political bravado into doubt. 

An affair shaking global chip supply chains 

So, what happened? At the end of September, the Dutch government did something unusual: it invoked emergency powers to place the Netherlands-based, China-owned chipmaker Nexperia under state supervision, citing concerns its technology could be passed on to Chinese owner Wingtech. The move stopped short of nationalisation, but it signalled a readiness to act on Europe’s oft-repeated mantra of semiconductor sovereignty. But less than two months later, The Hague reversed course. 

Beijing, angered by the intervention, blocked exports from Nexperia’s packaging plant in Dongguan—a small but globally significant producer of low-cost chips used in braking systems, window motors and dozens of vehicle sub-modules. These are not the high-performance processors that dominate geopolitical headlines; they are the “boring”, ultra-low-margin components that quietly keep Europe’s car factories running. When China turned off the tap, production lines across Europe were forced back into slowdown mode. Nissan, Honda and Bosch all cut output. The lesson of the 2020–21 crisis, i.e. that Europe must diversify and stockpile, proved to have evaporated the moment chip flows resumed last time.  

Under pressure from both Beijing and an automotive sector terrified of prolonged shortages, the Dutch government suspended its intervention. Formally, the emergency powers still exist; in practice, day-to-day control returned to Nexperia’s Chinese parent, Wingtech. The Netherlands had renounced the takeover of Nexperia, raising again the question of whether the EU is simply trapped in its technological dependence. Analysts are warning, however, that the whole affair represents deep fractures in global chip supply chains, which could have far reaching consequences for Western industry. “China’s decision to de-escalate was likely motivated by a desire to avoid triggering an accelerated decoupling of its semiconductor supply chains as well as a global trade war,” Klaus Schmitz, a partner at Arthur D. Little, told Asia Times in an interview.  

But from a European point of view, it would appear that despite its grand declarations of sovereignty, as soon as China squeezes, it steps back. 

Europe fails the stress test 

The timeline is instructive. Europe attempted, briefly, to assert control over a sensitive asset on its own soil. China responded by weaponising a chokepoint far from Europe’s borders, a single packaging plant capable of stopping European car production. Within weeks, the Netherlands was searching for a diplomatic exit. 

What this shows is that Europe’s vulnerability does not lie only in advanced chips or next-generation lithography, but in the humble components the automotive industry once treated as interchangeable commodities. Replacing a supplier is not as simple as placing an order elsewhere; these parts are embedded in modules whose qualification cycles can take months. The idea that low-margin semiconductors are globally abundant collapsed the moment China demonstrated the leverage it holds. 

It also shows that the distinction between “ownership” and “control” is largely illusory. The Dutch government could supervise the Dutch subsidiary and block certain decisions. But the centre of gravity, the aforementioned factory in Dongguan, remained out of reach. When Beijing acted there, the Netherlands had no practical countermeasure. The consequences landed not in political theory but in the real economy: assembly lines slowing, suppliers warning of lost revenue, and governments preparing for another winter of industrial anxiety.  

Analysts quoted by Asia Times argue that the affair marks a deeper shift, with Beijing signalling its willingness to weaponise even mid-range chips in geopolitical disputes. “Going forward, Western companies will undoubtedly intensify efforts to de-risk their semiconductor supply chains. From an industry-wide perspective, this implies that additional production capacity outside China will need to be established, especially since Nexperia was among the top 3 to 5 global suppliers in its segment,” explained Klaus Schwitz. If that assessment is correct, then Nexperia is but a preview of the pressures to come, and that Europe will have to turn to some more local chip manufacturers to shield against a fully blown supply crisis. 

Where Europe can find sovereignty 

There is an alternative European story in semiconductors, and it does not hinge on a single company. The Commission has actually created a dedicated Tech Sovereignty portfolio. As Henna Virkkunen, Executive Vice-President for Tech Sovereignty, Security and Democracy, put it at the Action Summit in Paris in February: “Today is a historical day – we have set the foundation for our future AI gigafactories… We will be ready to lead the way on AI with state-of-the-art infrastructure.” While foundries are an important factor, companies at the heart of the sector know perfectly well how to keep their priorities straight. 

This is particularly true of SiPearl and its Rhea1 processor, designed in Europe and destined for the JUPITER exascale supercomputer, is one part of a wider effort to rebuild technological capacity. The processor is now in production at TSMC. With 80 Arm Neoverse V1 cores and around 61 billion transistors, it is scheduled for sampling in  2026 and will equip JUPITER, Europe’s first exascale supercomputer operated by Forschungszentrum Jülich under the EuroHPC Joint Undertaking. 

In October 2025, SiPearl went a step further with Athena1, a “sovereign processor dedicated to dual-use applications”, designed for government, defence and aerospace workloads such as secure communications, cryptography, tactical networks and local data processing on vehicles. The chip is closed to the architecture of Rhea1 and will initially be manufactured and packaged in Taiwan, with packaging explicitly targeted to be repatriated to Europe to help grow a local back-end ecosystem. 

These innovations sit alongside other essential pieces: the European Processor Initiative, EuroHPC, expanding RISC-V programmes in Germany and Spain, STMicroelectronics and Infineon’s investments in power and wide-bandgap semiconductors, and the growing packaging and assembly projects supported by the EU Chips Act. Taken together, these show that Europe can still generate strategic IP and industrial momentum when policy, research and funding align. None of this delivers full autonomy, but it marks the beginning of a credible industrial posture. Europe is designing more of what it needs instead of importing it wholesale. 

Nexperia, by contrast, exposes a structural weakness: the ability of a single foreign packaging plant to rattle Europe’s core industries, and a political reflex that bends under short-term pressure. Sovereignty cannot be declared, and it certainly cannot be preserved by retreating whenever a supplier pushes back. It demands discomfort: higher costs, buffer stocks, diversified suppliers and investment in the “boring” layers of the value chain, such as analog, power, packaging and testing, and not just headline logic nodes.  

In short, Europe cannot claim sovereignty while relying on foreign-controlled assets for the cheapest components that keep its factories running. If the EU wants to avoid another crisis-driven scramble in a year or two, it must confront what the Nexperia affair revealed with painful clarity. Sovereignty requires a full-stack approach: exascale processors and open architectures, yes, but also the modest chips and packaging facilities that make industry resilient. Europe says it wants sovereignty. The Nexperia affair has shown what building it truly requires. 

About the author

Sean Brown is law graduate and a former economic development adviser who worked in Brussels for several years. Now retired, he closely follows the crises affecting the European Union and the United Kingdom, his country of origin. He is deeply committed to the idea of independence, both at national and at European level.