AMSTERDAM, Netherlands: The Dutch government has moved to take control of chipmaker Nexperia over concerns that sensitive technology could be transferred to its Chinese parent company Wingtech, which officials described as an "exceptional" intervention to protect national and European security.

The Ministry of Economic Affairs said the decision followed "acute signals of serious administrative shortcomings and actions" at Nexperia that could endanger "the continuity and safeguarding of crucial technological knowledge and capabilities on Dutch and European soil."

The move gives the Dutch state the authority to reverse or block management decisions deemed harmful, while allowing Nexperia's regular chip production to continue.

Wingtech's shares fell 10 percent in Shanghai after the announcement. The company said it was consulting with lawyers and seeking government assistance to "protect the legitimate rights and interests of the company."

In a stock exchange filing, Wingtech said the Dutch order and related court rulings would temporarily restrict its control over Nexperia, which could affect decision-making and operations.

Nexperia's Chairman Zhang Xuezheng was suspended from the company's boards on October 6 by an Amsterdam court, which ordered that an independent, non-Chinese director with a deciding vote be appointed in his place.

A Nexperia spokesperson said the company complies with "all existing laws and regulations, export controls and sanction regimes," but further comments were declined.

Nexperia, formerly part of Philips, is one of the world's leading manufacturers of basic semiconductors like diodes and transistors used in cars and consumer electronics. It also develops advanced chip technologies for efficient battery production. Wingtech acquired Nexperia in 2018 for about US$3.63 billion.

The intervention comes amid heightened Western scrutiny of Chinese involvement in the global semiconductor supply chain. Wingtech was added to the U.S. "entity list" in December 2024, marking it as a national security risk. At the time, Nexperia said it would comply with U.S. rules and maintain operational independence from its parent company.

However, Washington expanded those restrictions last month to automatically include subsidiaries 50 percent or more owned by sanctioned firms, a move that could indirectly tighten Nexperia's oversight. It was not immediately clear whether that policy shift influenced the Dutch decision.

The Netherlands, home to chip equipment giant ASML, has been coordinating closely with the United States on export controls for advanced semiconductor technology.