Nexperia’s Chinese owner Wingtech has just been told to jog on by a Dutch appeal court, keeping the Dutch chipmaker locked in a boardroom brawl that is messing with Europe’s car supply chain.
The Amsterdam appeal court upheld an earlier decision to suspend Nexperia chief executive Zhang Xuezheng, shift control to EU-based directors, and investigate allegations of mismanagement.
The court said it “finds that there are valid reasons to doubt the sound policy and conduct of business at Nexperia and orders an investigation”.
The Dutch government temporarily seized control of Nijmegen-based Nexperia in September, warning there was a threat to Europe’s security of supply because of Zhang’s actions.
Zhang’s shareholding was transferred to a trust, although he retained the economic benefits.
Since then, the European and Chinese arms of the business have stopped collaborating, triggering chip shortages that have already hit the car industry.
Nexperia’s Hamburg plant stopped shipping silicon wafers to China for final assembly into chips, citing nonpayment.
Customers have been buying wafers from the European arm and shipping them to the Chinese arm for assembly, apparently because Nexperia’s internal logistics are now part of the customer experience.
On Wednesday, the court’s Enterprise Chamber said there were “indications of negligent conduct involving a conflict of interest. Furthermore, there are indications that Nexperia’s director, under threat of impending sanctions, changed the strategy without consulting the other board members; agreements with the Ministry of Economic Affairs were no longer followed, the powers of European officials were curtailed, and their resignations were announced.”
Two investigators will now be appointed and will work for about six months, which in semiconductor terms is roughly three product cycles and an eternity of panic. The court also said it would examine Nexperia’s Dutch management’s conduct, granting Wingtech one of the requests it had pushed for.
In a hearing in January, Nexperia’s lawyers said Zhang was moving equipment to China and using Nexperia assets to prop up Wing Systems, another company he owned.
They said Wingtech was “doing everything it can to destabilise and had pressured virtually all of Nexperia’s business partners not to do business with it; and, as Nexperia understands from the Dutch economy minister’s statement of defence, it has even urged the Chinese government to impose export restrictions to harm Nexperia”.
During the hearing, Nexperia chief executive Zhang Xuezheng denied the allegations and said European management had mismanaged the business, adding that he had strengthened Chinese production to build a resilient supply chain against geopolitical shocks.
The US added Wingtech to its entity list in late 2024, requiring US companies to obtain licences to trade with it, and the US Commerce Department said in September it would extend restrictions to Nexperia as a subsidiary.
Court documents stated that U.S. officials “warned” the Dutch government that removing Zhang was necessary to avoid the listing, making it more of an order than a warning.
Nexperia said: “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.”
Wingtech said it regretted the ruling but claimed it had “always been confident that a full, fair and impartial inquiry would demonstrate that the actions taken by the shareholder were appropriate and in the best interests of the company and its stakeholders”
