The Dutch government’s emergency intervention of Nexperia—widely interpreted as an unprecedented assertion of state authority over a foreign-owned, strategically sensitive chip firm—has triggered a new debate across the EU. How far should governments go to protect semiconductor assets? And can Europe defend its sovereignty without deterring the very investment that keeps its chip ecosystem competitive?
Exclusive interviews with two experts closely following the evolution of Europe’s strategic safeguards show that the Nexperia incident is not an isolated shock, but a visible milestone in a continent-wide shift. Floor Doppen, senior program associate at the CELIS Institute, and Nick Houttekier, researcher at the Royal Military Academy in Belgium, describe a landscape where screening tools, industrial policy, geopolitics and state-firm relations are interacting in new and unpredictable ways.
For Houttekier, the Nexperia case is “clearly part of a broader shift” rather than a one-off reaction. Europe, he argues, has been drifting for several years into a geo-economic turn, a world where trade and investment policy are intertwined with security concerns and geopolitical rivalry.
According to Houttekier, the shift began around 2020 and has only accelerated since the pandemic and the deepening of U.S.–China competition.
“Instruments with a specific geo-economic goal are growing in number, changing the relation between states and firms,” he said. “Closer firm-state relations are resulting from the growing number of instruments that either provide incentives in the form of industrial policy or restrict the freedom of movement of firms or other private entities.”
Nexperia, he noted, crystallizes that evolution. The U.S. had already placed the parent company Wingtech on the Entity List in December 2024. Then on, Sept. 29, 2025, the U.S. Bureau of Industry and Security issued a rule extending U.S. export control restrictions to entities at least 50% owned by one or more entities on the U.S. entity list, which created downstream risks for Nexperia’s operations. That external shock forced The Hague to assume “direct operational control,” revealing how deeply Europe is now embedded in the U.S.-China rivalry.
Differences in cultures and the informal cooperation that stitches them together
Doppen’s research on investment screening shows that EU member states traditionally differed widely in how closely they work with domestic industry. France historically maintains tight informal coordination with key firms, while the Netherlands and the U.K. keep more distance. And Germany is somewhere in between.
“I see a strong informal relationship emerging between governments and semiconductor firms across Europe,” she said. “Geopolitics is pushing firms to engage with governments for insights and guidance.”
Still, cultural differences matter. France, Doppen observed, is accustomed to intervention. The Dutch model, built on openness and arms-length interactions between the government and companies, made the Nexperia takeover feel like an anomaly, even if it fit the new geo-economic era. Italy, she added, shares more of France’s willingness to intervene directly when strategic sectors are at stake.
This divergence will matter as Europe tries to develop a coordinated semiconductor-security framework. While the European Commission is pushing for harmonization, member states retain final authority for national-security decisions, and their approaches reflect deep institutional cultures.
Foreign direct investment (FDI) screening—now present in almost every EU country—was meant to give governments a structured way to review foreign acquisitions. But semiconductor security cannot rely on screening alone. For Doppen, investment screening can be “too slow and too rigid” in high-innovation sectors. Technologies evolve faster than the frameworks designed to review them.
“It protects, but it does not necessarily offer the flexibility needed for rapid intervention,” she said, adding that she expects the next wave of tools to involve security valves, such as broader ex-post powers or targeted emergency mechanisms.
Greenfield investments, such as new fabs and R&D centers, illustrate the gap. Most national screening laws do not cover greenfield projects, even though a new foreign-built fab could become strategically sensitive later. The Netherlands and Germany do not review greenfield investments at all, while Sweden and a few others do.
According to Houttekier, because many European countries did not introduce screening regimes until 2023, many critical assets were acquired long before screening existed. “You cannot go back without expropriation,” he said. “FDI screening will help in the future, but it cannot solve legacy ownership issues.”
And this is precisely what made Nexperia so politically explosive: a strategically important chip factory already owned by a Chinese parent company, with no clear path to rebalancing operational control—except through emergency takeover.
Several member states are now exploring mechanisms that go beyond review and into outright governance. France already uses golden shares and emergency nationalizations—tools that allow temporary control over firms without permanently disrupting investor rights. The French population, Doppen said, is less alarmed by direct state involvement. In past cases, French officials simply made clear they would block a transaction if food or energy security was at stake.
“They would shrug it off,” she said. “Intervention is part of the model.”
Houttekier said that these powers should remain reserved for “the most acute threats,” but acknowledges they will become more frequent. As industrial policy expands, such as subsidies under the EU Chips Act, states naturally attach conditions, including governance rights, supply-chain disclosure and restrictions on foreign ownership. Those requirements, he warned, may quietly disadvantage foreign-owned European semiconductor companies, not through spectacular takeovers but through reduced access to funding and R&D programs.
One of Doppen’s most important findings concerns the informal cooperation between member states and the European Commission. Even though screening decisions remain national, governments regularly exchange risk assessments and political signals behind the scenes.
“There is a lot of informal communication,” she said. “Especially when there is alignment on the security threat.”
This informal layer may be crucial for semiconductors, where risks cross borders and supply chains span multiple EU jurisdictions. Yet it raises its own problems: mitigation agreements—restrictions imposed on foreign investors—are often opaque even between member states.
Doppen points out that member states cannot easily take security concerns of another state into account in their screening decisions or their mitigation agreements. A remedy agreed in a transaction may include the protection of data if stored abroad, but only the data of that particular state. For example, Spain may include a provision that requires the investor to protect Spanish data, when stored abroad, but may not be able to extend this provision to German or French data.
Another example of the complexities she gives is that a small supplier in the Netherlands might be critical to a French defense contractor, yet Dutch law may not allow intervention on behalf of foreign security concerns. The result is a patchwork that risks inefficiency, over-compliance and gaps in actual security.
What Europe should do next
According to Houttekier, Europe should avoid focusing only on leading-edge technology, such as 3-nm nodes or EUV lithography. The U.S.–China rivalry has shifted from cutting-edge chips to mature nodes and could shift again.
“It’s like a waterbed,” he said. “Push in one place, the pressure moves somewhere else.”
Europe must also map its exposure across the entire value chain—materials, equipment, packaging, and crucially, dependencies that are hard to substitute. Blind spots can appear in unexpected segments, from raw materials to legacy chips to packaging tools.
All European countries face the same fundamental dilemma: How to protect sovereignty without undermining the investment that sustains innovation. Doppen stresses that this tension is not new but is now becoming more acute.
“Regulation and attracting FDI have always been in conflict,” she said. “The geopolitical context just amplifies the stakes.”
For Houttekier, there is an additional risk: overcorrecting for security threats and missing the systemic forces that shape global power. Europe’s strength, he said, does not come from dominating one choke point—ASML’s EUV machines, SWIFT, or rare earth alternatives—but from the totality of its industrial base, alliances, financial systems and security cooperation. Fixating too narrowly on one risk creates new vulnerabilities elsewhere.
The Nexperia takeover was dramatic, but it was also symbolic—a sign that Europe’s semiconductor-security regime is moving beyond notification requirements toward operational intervention powers. What remains uncertain is how far member states are willing to go, and whether Europe can coordinate these tools without fracturing the single market or scaring away essential investment.
The only certainty is that Europe’s playbook for chip security is expanding—and the semiconductor industry must adapt to a world where policy, geopolitics and technology are now inseparable.
https://www.eetimes.com/after-nexperia-can-europe-protect-chips-without-scaring-off-investors/
