(Yicai) Oct. 13 -- Top executives at Wingtech Technology’s subsidiary Nexperia filed an urgent court request earlier this month calling for China’s biggest smartphone assembler to hand over shares, and possibly control, of the Dutch chipmaker. The move came hours after the Dutch government froze the assets of Nexperia due to concerns over national security, Yicai learned from sources familiar with the matter.

Ruben Lichtenberg, a legal director and chief legal officer of Nexperia, along with two other senior executives, Chief Financial Officer Stefan Tilger and Chief Operating Officer Achim Kempe, filed an urgent request with the Enterprise Chamber of the Dutch court on Oct. 1 to initiate an investigation into Nexperia and to impose interim measures.

The day before, on Sept. 30, the Dutch Minister of Economic Affairs issued an order prohibiting Nexperia and its 30 global entities, including all subsidiaries, branches and offices, from making any changes to their assets, intellectual property, business operations or personnel for a period of one year, Wingtech said yesterday.

The Enterprise Chamber also suspended Nexperia’s Chief Executive Officer Zhang Xuezheng from his positions as non-executive director of Nexperia’s holding company and as executive director at Nexperia on Oct. 7, meaning that he will no longer be able to serve as CEO of the Nijmegen-based firm.

These rulings serve as temporary emergency relief, effective immediately, and will remain in effect until the court completes its investigation and issues a final judgment, the court said.

"The decision aims to prevent a situation in which the goods produced by Nexperia, both finished and semi-finished products, would become unavailable in an emergency. The company’s regular production process can continue,” the Dutch Minister of Economic Affairs said on the ministry website yesterday.

Wingtech issued a strong protest on its WeChat account today, accusing the Dutch government of excessive interference driven by geopolitical bias under the pretext of “national security” rather than conducting a factual risk assessment. The company said the move violates the European Union’s long-standing commitment to the market economy, fair competition and international trade rules.

Wingtech believes the scope and severity of the restrictions far exceed normal risk-control measures, amounting to an unreasonable external takeover of a business that is operating normally, Yicai learned from sources familiar with the matter.

For now, Nexperia’s day-to-day operations remain stable, but the ministerial order and the court’s ruling may temporarily disrupt its decision-making process. Wingtech’s control over Nexperia is currently restricted, although its economic rights as a shareholder remain unaffected.

Wingtech said it is actively exploring legal remedies and is in communication with related government agencies to seek support.

Wingtech’s share price [SHA:600745] plunged 10 percent to CNY41.83 (USD5.87) today, giving the Jiaxing-based firm a total market capitalization of CNY52 billion (USD7.2 billion).

Wingtech spent over CNY20 billion (USD2.8 billion) between 2018 and 2020 to gain 100 percent indirect ownership of Nexperia. The firm, which is a leading supplier of standard semiconductors, was formerly the standard products division of Holland’s NXP Semiconductors.

Nexperia, whose operations span the Netherlands, China, the UK, Malaysia, the Philippines and Germany, now forms a crucial part of Wingtech’s business portfolio. In 2024, Wingtech’s semiconductor division generated CNY2.3 billion (USD322.5 million) in net profit and CNY14.7 billion (USD2 billion) in operating revenue.

Wingtech was added to the US Commerce Department’s so-called Entity List, which prevents US firms from selling it their software and hardware, in December 2024.

Editor: Kim Taylor