Dutch chipmaker Nexperia has suspended shipments of wafers to its Chinese assembly plant, a move that could intensify a global semiconductor supply crunch already troubling automakers and electronics producers, according to a company letter seen by Reuters.
The letter, dated October 29 and signed by interim CEO Stefan Tilger, said the suspension—effective October 26—affected the firm’s Dongguan facility in southern China’s Guangdong province. The halt was described as “a direct consequence of the local management’s recent failure to comply with agreed contractual payment terms.”
Nexperia has been locked in a standoff with its Chinese subsidiary since the Dutch government seized control of the company from Chinese owner Wingtech Technology on September 30. The intervention, which also removed Nexperia’s China-based CEO, was justified by concerns that sensitive technology could be transferred to Wingtech.
Following the takeover, Nexperia’s Chinese unit resumed chip supplies to domestic customers but insisted that all transactions be settled in Chinese yuan, rather than in foreign currencies such as the U.S. dollar.
Nexperia produces large volumes of chips in the Netherlands that are essential for automotive and consumer electronics manufacturing. Around 70% of its Europe-made semiconductors are packaged in China before being distributed globally.
“While we have maintained shipments for as long as commercially feasible, continuing the current flow of supply from our front-end sites is no longer justifiable,” the company wrote. “Unless these contractual obligations are fully satisfied, we cannot resume wafer supply to the site.”
The company said it was developing alternative solutions to maintain supply to customers and stressed that the decision did not signal a withdrawal from China. “Nexperia remains committed to its operations in Dongguan and to finding a resolution,” the letter added.
Nexperia emphasized that it operates financially independent of Wingtech and does not rely on the Chinese firm for funding.
A company spokesperson confirmed that the letter had been sent but declined further comment. Nexperia China did not immediately respond to requests for comment, while Wingtech also declined to comment.
A spokesperson for the Dutch government said the wafer cutoff was a corporate decision and not a result of state intervention, which was aimed solely at preserving production capacity. The Netherlands, the spokesperson added, is in talks with European and Chinese authorities to find a “constructive solution.”
European tech chief Henna Virkkunen said after meeting with Nexperia executives on Friday that efforts were underway to reach a “diplomatic breakthrough,” while short- and medium-term measures were being explored to ease pressure on European manufacturers.
Court filings indicate that the Dutch government’s seizure of Nexperia followed rising U.S. pressure after Wingtech was placed on a restricted export list. In response, China’s Commerce Ministry blocked Nexperia from exporting chips from China on October 4.
The dispute has alarmed automakers and industry groups. Stellantis said Thursday it had established a “war room” to monitor developments, while Nissan said it had enough chips to maintain production until early November.
In recent weeks, prices for some Nexperia components that previously cost just a few Chinese cents have soared to two or three yuan each, more than tenfold, according to a person familiar with the matter.
Bd-pratidin English/ Jisan
