The confiscapitulation
Now the Netherlands is trying to figure out how to unseize Nexperia
What seems like only days ago, I wrote this article:
Boy, seems like ages ago… Because wonder wonder… What happened?
The Dutch government announced Thursday they’re ready to suspend their powers over Nexperia!
Their conditions? (conditions!!)
China needs to allow chip exports again. If shipments resume and get verified over the coming days, the Netherlands will revoke its ministerial order as soon as next week.
But the question that nobody in The Hague seems to be asking: why would China even bother?
The Netherlands just demonstrated—with lawyers, emergency powers, and theatrical press releases—that European governments will confiscate Chinese-owned assets whenever they feel like it.
They grabbed a freakin’ legal entity, a company! Under a war-time law that was never even used before.
They installed their own management.
They wrapped it in national security language and expected applause.
What they actually did was prove that property rights in Europe are conditional, that legal agreements mean nothing when geopolitics intrudes, and that Chinese companies operating in European jurisdictions are always one emergency law away from seizure.
So why would China resume chip supplies? Why would they give Europe what it desperately needs after Europe just proved it can’t be trusted?
As I wrote in my note:
China is restructuring their entire relationship on their terms.
As stated before: Nexperia’s Chinese operational part (you know, the one that ACTUALLY have the chips?!) will resume supplying Europe under three specific conditions:
First, customers must renegotiate exclusive supply agreements, establishing direct partnerships with Chinese entities and bypassing the seized Dutch headquarters entirely.
Second, all transactions must be settled in RMB, opening a new path in the dollar-dominated semiconductor trade.
And third, shipments to Europe will be dynamically adjusted based on domestic order demand, ensuring priority for Chinese domestic supply.
Yups… The Dutch can keep their hollow corporate shell. It shouldn’t (or that’s what I would do of course) even care to keep it, but focus on the actual power and strengthening their newly found structural advantages.
The Dutch just scored a MAJOR own-goal. Why would China even start to agree on erasing that fact??
European automotive manufacturers would have to negotiate directly with Chinese entities, not the Dutch headquarters their government just tried to control. They would pay in RMB, not dollars or euros, increasing yuan demand across the entire automotive supply chain. And they would be completely dependent on the goodwill of the Chinese government if they want to even get chips. Thus that makes European production subordinate to Chinese industrial priorities.
What the Dutch want is a restoration of the status quo.
China makes the cards.
China holds the cards.
What the European politicians are making is increasingly more hot air.
What the EU is holding is a figment of their imagination. An image of grandeur of a long by-gone era.
European automotive production can’t absorb multi-week supply disruptions. Just-in-time inventory systems don’t have buffer stock. Nexperia’s chips are running out. Next up: production lines will stop moving.
The Dutch government’s geopolitical theater will cost European manufacturers billions, and those manufacturers made it very clear that strategic autonomy isn’t worth shutting down factories.
This is what happens when you confiscate assets from a country that controls the production you depend on. China discovered that legal ownership doesn’t mean sh*t in the EU.
However, the EU discovered at the same time that their imagined legal ownership means nothing when you compare it to the actual manufacturing capacity.
They learned that a chihuahua can bark all they want to a dragon. But that the dragon won’t move.
Backing down now?
Nope, that ship has sailed.
I didn’t see any news yet about what the final decision would be, but it would strongly surprise me that the Chinese would back down from their claims.
Likely they will ask the same demands as I mentioned in my note, and keep the EU on a very tight lease. Something like you would do with an obstinate child.
“Die zijn gat verbrandt, die moet op de blaren zitten”
— Dutch proverb
There is a Dutch saying: burn your ass, sit on the blisters.
How poetic!
I had to gather the exact state of affairs surrounding Nexperia from several recent (vague) Dutch press articles and government statements. My summary of this from my Dutch homeland:
1) Since the dispute began, Nexperia's Chinese branch has stopped listening to the Dutch headquarters. In turn, the Dutch headquarters decided to stop supplying some of its chips to the branch in China (China processes, packages, and ships the chips.) Both parties accuse each other of failing to honor financial agreements.
2) In exchange for resuming exports, Trump promised to suspend several export restrictions on products from Chinese subsidiaries (such as Nexperia).
3) About 60% of Nexperia chips are supplied to the automotive industry. Aumovio supplies car manufacturers like BMW, Volkswagen, and Stellantis with components such as sensors, brakes, and automated driving systems that use its Nexperia chips. From production facilities in China, the company (China) now sends Nexperia chips to Hungary, from where they are then distributed to other factories. In other words, Aumovio placed a direct order in China, and that order has been approved by China. According to Aumovio, export restrictions in China have now been completely lifted.
4) The Netherlands and China still need to reach an agreement on control over Nexperia and the position of former CEO Zhang (of Wintech), who was ousted by the Netherlands. China has just today stated that it wants the Netherlands to take further steps to resolve the mutual conflict over chip company Nexperia.
So the Chinese have fulfilled their commitment to Trump, and the ball is now in the Netherlands' court. There hasn't been much progress there yet. And it looks like China is indeed already restructuring their entire relationship on their terms.
I don't know if China can take over the European part of the Nexperia chips. Beijing's response could be (and probably will be): if you limit us, we will come up with our own. China holds and make good cards. Then the Netherlands and the EU (+ USA), through their own fault, will have gotten exactly what they wanted to avoid. And besides being left with blisters to sit on, they'll also be up against the wall.
The time for messing with China/the BRIC countries or regarding them as backward is over. Learning and maturing is a process of struggle and growth. And that applies now even more to the West than to the South. Yes, the image of grandeur of a long by-gone era does not fit the West anymore. Looking deeper; It never fitted.
Big hat...no cattle. The Dutch, like the rest of the West, are a comedy troupe. Beyond pathetic.