Nexperia Stopped Supplying Semi-Finished Chip Components From Europe To China
Credit: Samsung Electronics
Nexperia, a chipmaker taken over by the Dutch government, has suspended silicon wafer deliveries to its assembly plant in Dongguan, China. The reason, reportedly due to disagreements over payment terms, is increasing the risk of further supply disruptions for major European automakers.
The business structure of Nexperia, a former spinoff of NXP, fell victim to geopolitical tensions between the Netherlands and China following the former’s decision to seize control of the chipmaker. Previously, Nexperia processed silicon wafers in Germany and the UK, sending them to China for chip packaging and testing, where they accounted for approximately 80% of its finished product output. Following the ouster of Nexperia’s Chinese CEO and founder of parent company Wingtech, Zhang Xuezheng, a rift emerged within the subsidiary, and production volumes in China began to decline.
According to a letter dated October 29, Dutch Nexperia suspended product deliveries to its Chinese facility, accusing the ousted Chinese director of “violating contractual payment terms.” The headquarters explained that they maintained supplies for as long as possible, but continued supply is no longer justifiable, and they have been suspended since October 26. Nexperia reports that it is exploring possible alternatives to processing silicon wafers with chips in China, striving to ensure the supply of finished products to its customers. At the same time, the company emphasizes that it has no intention of severing ties with its Chinese facility or leaving the local market, and that the pause in supplies is necessary in the hopes of a recovery from the crisis.
The European Automobile Manufacturers’ Association (ACEA) stated that the “critical” microchip shortage is worsening “by the day” and warned of an imminent disruption to European car production. ACEA called for a swift resolution.
