When the Dutch government seized Chinese-owned chipmaker Nexperia, it triggered a global supply scare, revealing how deeply Europe is trapped between American coercion and China’s growing technological muscle, and how vulnerable its industry has become in the Chip War.

On 30 September the Dutch government, citing national security and deploying a 1950 Cold War piece of legislation (the Goods Availability Act) seized control of a Chinese-owned company headquartered in the Netherlands. It set in motion a chain reaction that nearly shut down vehicle production on three continents.

The company, Nexperia, is a major supplier of semi-conductors to the automotive industry. The Dutch argued they needed to act to protect a vital part of European supply chains. Almost immediately, the Chinese struck back.

What happened next was a counter-strike of epic proportions and global implications.

Back in China, Nexperia’s owners, Wingtech Technology, decoupled their production facilities in Guangdong from Nexperia’s Nijmegen (Netherlands) headquarters. Simultaneously, the Chinese government issued an export block halting all future sales of components by the company, requiring those chips to be sold exclusively on the domestic Chinese market. Combined, these two moves set off a contagion of panic attacks amongst automotive executives in Europe, America and Asia.

Nexperia makes millions of transistors, diodes and power management components that are essential to cars produced by BMW, Honda, Hyundai, Mercedes-Benz, Nissan, Renault, Stellantis, Volkswagen, Volvo and many others. Car windows open, sensors detect objects, braking systems respond, air bags deploy and entertainment systems work because of these chips. These vehicles typically have dozens, sometimes over 100, Nexperia parts in them. About 70 per cent of the chip’s final value is added in China, the rest mainly in the Netherlands and UK.

The car industry relies on just-in-time delivery systems where components flow in a steady, carefully choreographed way across continents – which is highly efficient but relies on dependable supply chains. The Dutch threw a hand grenade into the system. But were........

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