In recent developments, China’s Wencai Technology has been actively pursuing the goal of regaining control over Nexperia, a Dutch semiconductor company. Recently, Nexperia filed a lawsuit against Wencai Technology in a Dutch court, demanding compensation amounting to $2 billion, and proposed a restructuring plan known as the “Two Circles” scheme.
On November 5, reports from mainland media indicated that the publicly listed Wencai Technology, which is facing delisting, had announced on the Shanghai Stock Exchange that the court-appointed administrator had suggested restructuring the equity of Nexperia using the “Two Circles” framework. Wencai Technology, however, responded in writing, clearly stating that it could not accept this proposal. At the same time, Nexperia’s overseas entities have been simultaneously advancing litigation and applying for interim measures, both domestically and internationally.
The official correspondence from the court-appointed management of Nexperia, along with its temporary non-executive directors, pointed to the necessity of a short-term adjustment in the company’s equity structure. This conclusion was drawn after considering evaluations and recommendations from multiple third-party organizations. The proposed “Two Circles” restructuring would allow Wencai Technology to maintain ownership and control over its operations in China while separating Nexperia’s global business and introducing external investors. Under this scheme, Wencai Technology would be relegated to a minority stakeholder in the overseas operations.
Nexperia has reportedly enlisted legal counsel to inform Wencai Technology that it has initiated legal proceedings in a Dutch court. The lawsuit targets Wencai Technology, its actual controller Zhang Xuezheng, along with Nexperia (China) Co., Ltd. and Nexperia (Shanghai) Co., Ltd. The claims allege that the Chinese branches have violated relevant internal agreements, constituting a breach of contract, and are responsible for damages. Additionally, the complaint argues that all defendants improperly established supply chains in China, disrupting Nexperia’s normal operations and creating direct competition, which is classified as unfair commercial practice under Dutch civil law. The core request made by Nexperia is for each defendant to be held jointly liable for $2 billion in damages along with statutory interest accruing from October 1, 2025.
In its counter-response, Wencai Technology stated that neither the company nor its associates Zhang Xuezheng, Nexperia China, and Nexperia Shanghai recognize the entirety of the accusations, causal claims, or the compensation amount proposed.
On November 2, Wencai Technology was served with a civil ruling by the Intermediate People’s Court of Dongguan, which prohibited Nexperia from selling, diluting, transferring, or disposing of any equity and its directly or indirectly held subsidiary stakes. This ruling also extends to related domestic and international intellectual property rights, additionally forbidding any transfer or encumbrance of any assets under its control. Violating this court decision incurs a daily fine of 100,000 RMB from the day of the infraction, accumulating over time.
Previously, the court had seized, detained, and frozen assets belonging to Nexperia in China, amounting to approximately 2.139 billion RMB.
Publicly available information reveals that Nexperia is a leading global manufacturer specializing in discrete and power chips, as well as one of the top automotive semiconductor companies worldwide, boasting nearly 16,000 different products. The core value of Nexperia lies in its semiconductor fabs and a global network of intellectual property.
With the intensifying technological rivalry between China and the U.S., as well as between China and Europe, the Dutch government and Nexperia have leveled three charges against Wencai Technology: illegal asset and core technology transfers, breaching agreements to establish direct competitive businesses, and improper management accompanied by governance flaws. As a result, Nexperia has halted its supply of wafers to the Chinese market.
Currently, the ruling from the Dutch business court remains in effect, and Wencai Technology’s control over Nexperia’s overseas entities continues to be restricted.