The Chinese billionaire accused of stealing Britain’s chip industry

Zhang Xuezheng has often been in as much trouble in his home country as abroad.

The 50-year-old Chinese billionaire and his technology giant Wingtech have repeatedly found themselves on the wrong side of local authorities, resulting in millions in fines and even a 17-month jail sentence.

Zhang – often known by his nickname Wing – is now accused of an alleged heist of British and European technology, claims that have triggered an unprecedented seizure of his company assets that now threatens to bring the car industry to a halt.

Last month, the Dutch government triggered a Cold War law that had never been used before to take control of Nexperia, the Nijmegen-based semiconductor company that Zhang’s business Wingtech acquired in 2019. Zhang himself has been removed as chief executive by a Dutch court and has not been publicly seen or heard of since.

The seizure has sparked a row with China, where Nexperia’s chips are sent to be processed before they enter the automotive supply chain. Beijing has blocked exports of Nexperia products and local staff have been told to ignore orders from the Netherlands.

It has raised national security questions in the United Kingdom, where Nexperia has a major facility in Manchester and employs more than 1,000 people.

The crisis threatens to bring car production lines across Europe to a halt. Nexperia’s power chips are crucial to modern cars and particularly in electric vehicles, and their supply has slowed to a trickle. Volkswagen has warned it only has enough chips to last until the end of next week.

To some observers, Nexperia and the Dutch government have become pawns in the Trump administration’s tech war with China. The Hague seized Nexperia on the same day that the White House announced new rules that would see the company added to a US export blacklist.

But gradually, a different story has emerged, with Zhang as the chief protagonist.

According to the Dutch government, the globe-trotting executive was on the verge of executing a daring plan to hollow out Nexperia, transfer its technology to China, and enrich himself in the process.

Zhang boasts a scrappy entrepreneur story that matches the boy-wonder tales of Bill Gates and Steve Jobs. Born in the regional city of Meizhou to a farming family, he worked for local mobile phone manufacturers at the dawn of China’s entry into the World Trade Organisation, including national champion ZTE, before leaving to set up his own manufacturer with two colleagues.

He was accused of taking more than just fellow employees. In 2005, a court sentenced him to 17 months in prison for stealing trade secrets from ZTE in order to grow his own company.

When he left prison, he started again, setting up Wingtech. According to a profile in the Chinese financial paper Securities Times, he started the company with the equivalent of £10,000 and went door to door around the electronics hub of Shenzhen, carrying two computers and mobile phones to sell his circuit board design to manufacturers.

The company later upgraded to assembling smartphones on behalf of a new generation of low-cost Chinese manufacturers such as Xiaomi and Huawei, before landing a huge customer in Apple.

Nexperia, however, represented his biggest bet yet. The company’s history dates back to Mullard, the British manufacturer whose radio vacuum tubes enabled the rise of BBC Radio. It was acquired by Dutch giant Philips in the 1920s, becoming one of Europe’s microchip pioneers.

In 2016, the company, now known as NXP, was seeking to spin off its commodity chips business, which mass manufacturers simple components, to pay down debt and focus on more profitable high-end devices. The spin-off, Nexperia, was sold to a Chinese consortium with Wingtech taking full control in 2019.

Zhang appointed himself chief executive the following year and has split his time between China, the Netherlands and San Francisco since then.

His net worth is estimated by Forbes at $1bn (£761m), although this has fallen from $2.2bn three years ago. In 2020, he led a group of Wingtech employees running the Shanghai marathon, setting a personal best.

The Nexperia deal initially attracted almost no Western scrutiny. The US waved through the takeover and it did not even merit an investigation in Europe. Few in the West had heard of Wingtech. A Bloomberg headline on the deal read: “Obscure Chinese firm to buy Nexperia for $3.6bn.”

In fact, more eyebrows were raised in China. The country’s Securities Regulatory Commission forced Zhang to hold a press conference explaining the deal, given the change of strategy and amount of debt required for the takeover. Zhang explained that the deal was part of a strategy to go upmarket, moving from assembling electronics to the more profitable semiconductor business.

It would not be the only clash with Chinese authorities. In 2019, the Shanghai Stock Exchange censured directors for failing to disclose that a subsidiary was borrowing money from a company affiliated with a major shareholder at expensive rates. Later, Zhang was fined 8m yuan (£860,000) after failing to disclose that he was acting in concert with other investors to buy up shares in the company.

It was not until 2021 that the company started attracting Western attention. In July, as the car-making world was gripped by a chip shortage, Nexperia paid £65m to acquire Newport Wafer Fab, Britain’s biggest microchip facility, which was in financial trouble.

Tom Tugendhat, the Conservative MP, urged the Government to investigate the takeover on national security grounds. Boris Johnson’s government initially refused, but then relented, and the deal was blocked a year later, with Nexperia forced to sell the plant. One source tells The Telegraph that new intelligence from US sources was one reason for scuppering the takeover.

Opponents of the deal at the time raised the prospect that Nexperia may have transferred technology from Newport to its tech bases in China in the 18 months that it owned the plant. This has never been proven, but recent events have resurfaced the issue.

Dutch officials accuse Zhang of transferring intellectual property from Nexperia to a “foreign entity”, believed to be WingSky Semi, a separate microchip company owned by Zhang.

Local reports say this includes details of chipmaking processes at Nexperia’s Manchester facility, and that Zhang also planned to move equipment before shutting down Nexperia’s European operations.

They also claim that Zhang used Nexperia to prop up his other company, placing $200m worth of orders with WingSky Semi, in excess of what it needed, and fired executives who complained. US officials had separately called Zhang’s running of Nexperia “problematic”. The UK Government has said it is monitoring the situation.

Wingtech said it denied allegations of “technology transfer” and “technology theft”, and that a “collaboration” with WingSky was approved by the company’s bosses, with Zhang abstaining. It did not comment on Zhang’s previous criminal conviction or brushes with Chinese regulators.

The company has demanded that Zhang be reinstated. There seems to be little chance of that. Nexperia has stopped sending chips to China for processing, while the company’s local staff have been told by the Chinese parent to ignore orders from the Netherlands.

Zhang has previously lamented being swept up in geopolitics. He told a conference in China this year that globalisation was a “historical inevitability”, and earlier this year hit out at a forced sale of Wingtech’s consumer electronics division under US sanctions.

“It’s bulls— that I have to sell my company,” he told Dutch outlet NRC earlier this year. “The Americans say we’re a Chinese company. And in China, they say we’re a Dutch company. How can we survive like that?”

Dutch officials say that Zhang has, in fact, brought the situation on himself by attempting to misuse Nexperia for his own financial gain.

The Netherlands’ ministry of economic affairs accuses him of “undermining of production capacities within Europe” and “misuse of financial resources for the CEO’s self-enrichment”.

It says it needed to intervene to “preserve this ecosystem that is crucial to Europe”. If technology has indeed been transferred from Manchester to China, it may be too late.

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