Nexperia Denies Chinese Unit's Allegations Amid Supply Chain Crisis
Nexperia, the Dutch semiconductor company, has firmly rejected claims made by its Chinese subsidiary that it is intentionally disrupting production by blocking wafer supplies. The ongoing internal conflict within the company continues to escalate despite recent efforts by Beijing to restore supplies of critical automotive components.
In a strongly worded statement released on Friday, the Nijmegen-based company asserted that Nexperia China should possess sufficient wafers and finished products to maintain operations for several months. The company expressed serious concerns about stock management practices by local management in China, casting doubt on the validity of the subsidiary's claims.
Internal Tensions Threaten Automotive Industry
The public disagreement emerged after the Chinese subsidiary informed employees that Dutch management was deliberately blocking essential supplies, failing to allocate necessary funds, and withholding operational support. This internal conflict occurs against the backdrop of a broader geopolitical standoff between the Netherlands and China over semiconductor control.
Nexperia, owned by Chinese firm Wingtech Technology Co., plays a crucial role in the global automotive industry by supplying power-control chips to major automakers including BMW AG and Volkswagen AG. The current dispute has already caused significant disruptions to car production across Europe and beyond.
Political Intervention and Ongoing Negotiations
The crisis began in September when the Dutch government assumed control over key decisions at Nexperia, citing concerns that Wingtech founder Zhang Xuezheng, who also served as Nexperia's CEO, was engaging in asset-stripping for his other business interests. This move threatened the supply of vital chips to European markets, prompting Beijing to restrict exports of Nexperia's products from China.
Recent weeks have seen some progress in negotiations, with Chinese authorities facilitating the resumption of some exports from Nexperia's Chinese facility. However, the company emphasized that this represents only a partial relaxation of export restrictions through exemptions rather than a full restoration of the supply chain.
Nexperia operates fabrication facilities in Germany and the UK, shipping wafers for testing and assembly to sites in China, Malaysia, and the Philippines before returning most components to European markets. The company's Guangdong facility in China ranks among the largest of its kind globally.
To mitigate ongoing supply disruptions, Nexperia has implemented alternative solutions including direct sales and shipments of wafers to customers. The company remains committed to maintaining these workaround measures until normal supply chain operations can be fully restored.
Looking ahead, Nexperia plans to expand capacity at other locations through a phased approach scheduled for completion by 2026.
Diplomatic Tensions Continue
The political dimension of the conflict remains tense, with China's Ministry of Commerce expressing strong disappointment on Friday over recent comments from Dutch Minister of Economic Affairs Vincent Karremans. Chinese officials described the minister's statements as misleading and reckless, particularly concerning given planned talks in Beijing.
This criticism came in response to Minister Karremans telling The Guardian on Thursday that he would make the same decision again to assert control over the Chinese-owned chipmaker. A Chinese commerce ministry spokesperson stated that the Dutch government's seizure of Nexperia transformed a previously stable global chip supply chain into chaos.
A Dutch delegation is scheduled to travel to Beijing early next week seeking a mutually agreeable solution to the Nexperia crisis, though recent exchanges suggest diplomatic resolution remains challenging.
