Dutch courage

On Tuesday 30 September a minister in The Hague signed an order under a law most Dutch lawyers had never needed. It was not announced until Sunday 12 October.^{1Government of the NetherlandsMinister of Economic Affairs invokes Goods Availability Act at Nexperia12 Oct 2025} The law is the Goods Availability Act, designed to keep vital supplies flowing in a crisis. The target was Nexperia, a chipmaker headquartered in Nijmegen which makes chips used in the European car industry and in consumer electronics.^{1Government of the NetherlandsMinister of Economic Affairs invokes Goods Availability Act at Nexperia12 Oct 2025}

The government’s stated reason is “acute signals of serious governance shortcomings and actions” at the company, which it says threatened the continuity of crucial technological knowledge and capabilities in the Netherlands and Europe.^{1Government of the NetherlandsMinister of Economic Affairs invokes Goods Availability Act at Nexperia12 Oct 2025} The order lets the Minister of Economic Affairs block or reverse company decisions that could damage Nexperia’s interests or its future as a Dutch and European enterprise. Production carries on. The government calls the step “highly exceptional” and says it is aimed at this firm alone, not at the sector or at any other country.^{1Government of the NetherlandsMinister of Economic Affairs invokes Goods Availability Act at Nexperia12 Oct 2025} Nexperia’s owner, Wingtech of China, which agreed in 2018 to buy it for about $3.6bn,^{2eeNews EuropeNexperia sold for $3.6bn to Chinese smartphone contract manufacturer8 Nov 2018} can object before the courts.^{1Government of the NetherlandsMinister of Economic Affairs invokes Goods Availability Act at Nexperia12 Oct 2025}

We think the Dutch government is right about the problem and wrong about the instrument, and the second error matters more than it looks.

Begin with the problem. Nexperia is not a glamour name, but it is not trivial either. It made $2.36bn in revenue in 2022.^{4eeNews EuropePower discretes drive Nexperia to $2.36bn in 20223 May 2023} A Chinese parent that can reorder a European supplier’s priorities, when that supplier’s chips end up in cars, is a risk that a Dutch minister is entitled to take seriously. Britain reached the same conclusion in November 2022, when it ordered Nexperia to sell at least 86% of its stake in the Newport Wafer Fab over security concerns, a decision Nexperia said it did not accept.^{3eeNews EuropeNexperia forced to sell Newport Wafer Fab stake16 Nov 2022}

Now the counter-argument, in its strongest form. Europe has no quick, purpose-built power to freeze a company’s governance when the decisive facts are secret. Investment screening is designed for acquisitions, not for the slow capture of a firm already bought. Newport shows the alternative: a slow review and a forced sale. If an emergency law is the only fast tool in the cupboard, why not use it?

Because the cupboard should be better stocked, and because the law was written for a different kind of emergency. The act’s stated purpose, in the government’s own words, is to ensure that finished and semi-finished goods stay available.^{1Government of the NetherlandsMinister of Economic Affairs invokes Goods Availability Act at Nexperia12 Oct 2025} It is a scarcity statute. Using it to settle who runs a boardroom stretches it, and every stretch sets a precedent. The next government, of whatever stripe, will read the same words and consider which foreign-owned firm in Eindhoven, Veldhoven or Rotterdam might be an “acute signal” of its own. Investors in the Netherlands, who were not asked, will price that in. So will the other Dutch firms that depend on Chinese customers and on good relations in Beijing.

The government insists its step is not directed at other companies, the sector or other countries.^{1Government of the NetherlandsMinister of Economic Affairs invokes Goods Availability Act at Nexperia12 Oct 2025} Nexperia’s owner is Chinese all the same, and that is a distinction Beijing will find easy to ignore. A measure presented as technical will be read as political, and Beijing has plenty of ways to reply that do not involve a court in Amsterdam.

The cure is dull. The cabinet should put a time limit on the order, say what outcome would end it and publish enough of the evidence for the courts to test. Parliament should then pass a screening law that covers the creeping loss of control over strategic firms, not only the headline takeover, with rules that apply the same way to a Chinese, American or Gulf owner. Europe’s chip policy rests on firms such as Nexperia, and a policy that depends on a statute meant for shortages is not much of a policy.

Dutch courage, as the old jibe has it, is bravery borrowed from a bottle. An emergency law borrowed for a boardroom dispute wears off just as quickly.