Legal Battle Over Nexperia Sparks Global Chip Shortage

The Amsterdam court battle between Dutch chipmaker Nexperia and its Chinese owner Wingtech raises concerns over management and operational stability, affecting global chip supply. Allegations center on mismanagement under former CEO Zhang Xuezheng and the potential transfer of operations to China, leading to international legal and governmental interventions.

On Wednesday, the legal teams of Dutch chipmaker Nexperia and its Chinese parent company, Wingtech, faced off in an Amsterdam court. The courtroom drama has had significant repercussions, with a global chip shortage as a direct result. Central to the case are allegations of mismanagement linked to Nexperia's former CEO, Zhang Xuezheng, and debates over whether control should again be in Wingtech's hands.

The dispute stems from the Dutch government's seizure of Nexperia on September 30, citing fears of operations and intellectual property being transferred to China. Though the decision was later revoked, the court's preliminary ruling found sufficient reason to suspect mismanagement, resulting in Zhang's suspension and a Dutch lawyer's temporary control of Wingtech's shares.

This turmoil plays out against a backdrop of broader economic tensions. Global powers, including the U.S., the Netherlands, and China, have instituted and revoked measures against Nexperia, impacting the automotive sector deeply reliant on these chips. Nexperia's ongoing legal saga poses risks to its operational continuity, as it explores new avenues for sustainability, such as expanding into Malaysia.