Kathmandu — Shares of Wingtech Technology Co., a Chinese semiconductor and electronics firm, tumbled by 10% — hitting the daily limit on Monday after the Dutch government moved to take control of its European subsidiary, Nexperia. The rare intervention has raised concerns about worsening tensions between China and Europe over technology and national security.

The Netherlands invoked the Goods Availability Act in September, citing national security risks, to assume control of Nexperia — a major car chipmaker based in the country. Under the order, the government can block or reverse Nexperia’s key decisions, though the company is still allowed to continue regular operations.

The Hague has also demanded that Wingtech suspend any changes to Nexperia’s assets, business operations, or personnel for up to one year. Wingtech confirmed this in a statement released on Sunday, calling the move “unilateral” and “exceptional.”

According to Dutch authorities, the action was taken after identifying “serious governance shortcomings” within the Chinese-owned company that could threaten the continuity and safeguarding of crucial technological knowledge and capabilities in Europe. Officials said the loss of such expertise could pose risks to Dutch and European economic security.

Wingtech, which acquired Nexperia for $3.6 billion in 2018, has faced growing scrutiny from Western governments in recent years. The United States added Wingtech to its Entity List in 2023, restricting its access to U.S. technologies. Similarly, in 2022, the UK government ordered Wingtech to unwind its acquisition of Britain’s largest microchip factory, more than a year after the deal had closed.

Founded in 2006 by Zhang Xuezheng, a former engineer for ZTE Corp., Wingtech initially operated as a smartphone manufacturing contractor for major brands, similar to Apple supplier Foxconn. Later, it expanded into semiconductor design, production, and packaging through its acquisition of Nexperia.

In recent developments, a Nexperia executive has filed a court petition in the Netherlands to launch an internal investigation and impose interim management measures. The court has suspended Zhang from his executive roles at Nexperia until the investigation is concluded.

Last year, the Netherlands also investigated Nexperia’s proposed acquisition of Nowi Energy BV, another chipmaker — a deal that was eventually approved.