Amsterdam, Netherlands Reuters —

The Dutch government has said it is taking control of Dutch chipmaker Nexperia, which manufactures computer chips for the car and consumer electronics industries, due to worries about the possible transfer of crucial technology to its Chinese parent company, Wingtech.

The move prompted a 10% fall in Wingtech’s shares in Shanghai Monday, and the firm said in a statement it was consulting with lawyers and seeking government support to “protect the legitimate rights and interests of the company.”

The Dutch Ministry of Economic Affairs said late on Sunday that its intervention was “exceptional” and came in reaction to “acute signals of serious administrative shortcomings and actions” at the company.

The move allows the government to reverse or block management decisions it sees as harmful, but the company’s regular production may continue.

“These signals threaten the continuity and safeguarding of crucial technological knowledge and capabilities on Dutch and European soil,” the ministry said. “The loss of these capabilities could pose a risk to Dutch and European economic security.”

Wingtech said in a stock exchange filing that its control over Nexperia would be temporarily restricted due to the Dutch order and court rulings, affecting decision-making and operational efficiency.

Chairman Zhang Xuezheng was suspended from Nexperia’s boards by an Amsterdam court order on October 6, and an independent non-Chinese person with a “deciding vote” would be appointed in his place, Wingtech said.

A spokesperson for Nexperia said the company adheres to “all existing laws and regulations, export controls and sanction regimes,” and declined further comment.

Nexperia is one of the world’s largest makers of simple computer chips such as diodes and transistors, though it also develops more advanced technologies aimed at using chips to make batteries more efficiently.

Wingtech purchased 100% of Nexperia, once part of Dutch firm Philips, for around $3.63 billion in 2018.

Wingtech was placed on the United States’ “entity list” in December 2024, identifying it as a national security concern. Nexperia said at the time that it would comply with the US rules, but that would not greatly impact Nexperia’s operations, which it argues are kept at arm’s length from Wingtech.

However, last month the US expanded entity list rules to automatically include subsidiaries that are 50% or more owned by companies on the entity list.

It was not immediately clear whether that move was linked to the Dutch government action, though the two countries cooperate closely on computer chip industry export controls.