A court in Dongguan, Guangdong province, has ordered the freezing of 2.14 billion yuan (approximately HK$2.5 billion) in assets linked to Nexperia, a semiconductor manufacturer, marking a significant step in the ongoing dispute between Nexperia and its Dutch shareholder, Wingtech. The Dongguan Intermediate People’s Court froze equity interests in four Chinese subsidiaries owned by Wingtech, as well as stakes in another entity owned by Itec BV, a chip equipment maker spun off from Nexperia in 2021. The freeze covers assets located in Dongguan, Shanghai, and Wuxi and will remain in effect until August 2029.
According to legal experts, the freeze aims to prevent the transfer or pledging of Chinese subsidiaries’ assets while allowing their daily operations to continue unhindered. Luo Zhiyu, a partner at DeHeng Law Offices in Beijing specializing in cross-border legal matters, noted that the order helps safeguard local assets during the custody dispute. However, the freeze could be lifted pending a court ruling after the case advances, a process that may take months or even several years depending on whether the parties reach a settlement or proceed with full litigation.
The legal battle originated last May, when Wingtech filed a lawsuit against Nexperia and three of its executives under China’s anti-foreign sanctions law. Wingtech is seeking to regain full control of Nexperia and is demanding 8 billion yuan in compensation. The case has yet to be heard in court.
Nexperia stated that the court's actions only affect entities operating independently of its governance in China since October 2023. The company is currently reviewing the court order and exploring its legal options. Itec BV did not immediately respond to requests for comment.
The dispute traces back to September of last year, when the Dutch government moved to limit Wingtech’s influence over Nexperia, a decision that was subsequently suspended. In October, a Dutch court removed Wingtech founder Zhang Xuezheng from his position as Nexperia’s CEO. This power struggle led to the de facto separation of Nexperia’s China operations—which account for about 70 percent of the company’s global production—from its facilities outside China.
One consequence has been the cessation of wafer supplies from Nexperia’s factories in Germany and the United Kingdom to its Dongguan plant. In response, Nexperia’s China subsidiary announced plans last month to source wafers exclusively from a domestic 12-inch wafer supplier, aiming to operate independently.
Wingtech, listed on the Shanghai Stock Exchange, has shifted focus towards semiconductors after divesting most of its other electronics businesses. The company reported a net loss of 189 million yuan in the first quarter of 2024.