Netherlands Deploys Cold War Weapon in the Chip Battle
In a move that seems straight out of a geopolitical thriller, the Dutch government has invoked a 1977 law —originally created during the Cold War— to effectively take control of the Chinese chip maker Nexperia. This decision, which allows the state to appoint new executives and oversee critical operations, marks a turning point in the growing technological tension between the West and China. What began as a normal business acquisition in 2018, when the Chinese group Wingtech bought Nexperia for $3.6 billion, has become a strategic battlefield in the war for semiconductor supremacy. 💥
The 1977 Investment Law: A Cold War Ghost Resurfaces
The legislation the Netherlands is using dates back to an era when the fear was Soviet influence, not Chinese. This law, originally designed to protect critical infrastructure during the Cold War, grants the government extraordinary powers to intervene when it considers national interests at risk. Its application to Nexperia —which employs thousands of people in the Netherlands and is crucial for global supply chains— demonstrates how old geopolitical instruments are being repurposed for new technological conflicts. The message is clear: chips are the new frontier of national security. ⚖️
Powers Granted by the 1977 Law:- ability to appoint and remove executives and supervisors
- authority to veto strategic and financial decisions
- power of continuous inspection and auditing of operations
- faculty to impose specific security conditions
Nexperia: The Tech Jewel in the Eye of the Hurricane
Originally founded as a Philips division in 1953 and later part of NXP Semiconductors, Nexperia specializes in discrete, logic, and MOSFET semiconductor components that are critical for countless industries: from automotive to medical devices. Although it does not manufacture cutting-edge chips like TSMC or Samsung, its components are essential for assembling electronic products worldwide. This position in the global value chain is precisely what makes it so strategically valuable —and vulnerable— in the current technological confrontation. 🔌
In the semiconductor era, every technology company is potentially a national security issue
The Geopolitical Context: Expanding Restrictions
This Dutch move does not occur in a vacuum. It follows growing U.S. restrictions on chip technology exports to China and reflects increasingly tight Western coordination. The Netherlands, as home to ASML —the world's only manufacturer of EUV lithography machines essential for advanced chips— finds itself in a particularly delicate position. The intervention in Nexperia can be interpreted as a message to Beijing: even seemingly safe acquisitions are under scrutiny. 🌍 Timeline of Recent Tensions:
- 2022: U.S. restrictions on chip exports to China
- 2023: Netherlands restricts ASML technology exports
- 2024: security investigation into Nexperia
- 2025: government intervention using 1977 law
Implications for the Global Semiconductor Industry
This intervention sets a dangerous precedent for all companies with foreign owners in sectors considered strategic. We could see an accelerated fragmentation of global semiconductor supply chains, with increasingly defined technological blocs. For companies, it means country risk assessments must now consider not only economic factors, but also geopolitical vulnerabilities that can manifest years after an acquisition. The era of purely commercial semiconductors may be coming to an end. 📈
The Future of Nexperia and China's Strategy
The Chinese government faces a complex dilemma: accept the Dutch intervention or respond with countermeasures that could escalate the conflict? Wingtech, the Chinese owner, has invested significantly in Nexperia and will likely fight to protect its investment. Meanwhile, Nexperia's employees and customers worldwide watch nervously as their essential supplier becomes a pawn on a much larger geopolitical board. The outcome could shape the landscape of cross-border technology investments for the next decade. 🤝
Possible Development Scenarios:- quiet negotiation that maintains operations with oversight
- escalation with Chinese retaliation against European companies
- forced sale to "more acceptable" Western owners
- prolonged legal fragmentation that damages the business
The Netherlands' intervention in Nexperia marks a historic turning point where technology and geopolitics intertwine irreversibly. It demonstrates that in the 21st century, chip factories can be as strategic as tank factories were in the 20th century. And it reminds us that when national interests clash with technological globalization, even Cold War laws can find new purpose in very different wars. The global semiconductor board has just become much more complex. ♟️