SunSirs: Netherlands’ High-Risk Move Amid Rare Earth Supply Constraints

On September 30, 2025, the Dutch Ministry of Economic Affairs and Climate Policy suddenly announced the freezing of assets, intellectual property, and personnel adjustment authorities of 30 entities under the Chinese company Wintell Technology's Nexperia Semiconductor, citing "national security threats," with a freezing period of one year. A week later, the Dutch court, without a public hearing, ordered the suspension of the Chinese CEO's duties, the transfer of 99% of the company's shares to a third party for safekeeping, and the appointment of a foreign director with decisive voting rights. This means that the Chinese company has completely lost control of the company it has acquired for six years, retaining only the economic benefits of the shares as a shareholder.

Nexperia, as the global leader in the discrete and power chip sector, has a wide range of products used in automotive electronics and industrial control, and has been operating stably for six years since the acquisition. The Dutch action is regarded as " Score settlement" by the industry.

The backdrop of this Dutch action is China's recent export control policy on rare earths. According to the new regulations, any foreign product containing more than 0.1% of Chinese rare earths must obtain Chinese approval. This provision directly hits the fatal weakness of ASML, the Dutch lithography giant. Industry data shows that the core components of ASML's lithography machines, such as lasers and magnets, rely entirely on rare earth elements. A report by the Financial Times notes that China's rare earth regulations have led to delays in the delivery of some of ASML's equipment.

China has a grip on about 90 percent of the world's high-purity rare earth production capacity, and it is unmatched in rare earth smelting and refining technology. Even if ASML urgently looks for alternatives, the problem of rare earth supply cannot be solved in the short term.

The Dutch move is a dangerous strategic miscalculation. It attempts to increase its bargaining chips in the China game by seizing Chinese assets, yet it underestimates the true weight of China's "rare earth ace". On the one hand, the Netherlands hopes to force China to resume rare earth supplies and alleviate the production pressure on ASML; on the other hand, it is trying to cooperate with the United States to curb the development of China's semiconductor industry. However, this "two-faced" strategy has put the Netherlands in a deeper dilemma.

China's rare earth control is a reasonable response to the Western long-term technology blockade, not an active provocation of disputes. The Dutch action not only fails to solve the rare earth supply problem, but may also invite a more resolute countermeasure from China.

On October 4, 2025, China's Ministry of Commerce issued an export control notice prohibiting Nexperia China and its subcontractors from exporting specific finished components and subassemblies produced within China. The measure, aimed at safeguarding national security, has had a substantial impact on the company's global operations.

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