Nexperia's China unit pledges stable chip supply despite Dutch headwinds

Nexperia's China unit has reassured customers that its chip production will remain stable, despite a sudden halt in semiconductor wafer shipments by the company's Dutch headquarters to its production plant in Dongguan, Guangdong province.

In a statement released on Sunday, the Chinese arm of the company said it had multiple contingency plans in place and had secured new wafer suppliers to ensure stable and continuous deliveries "through the end of the year and beyond".

The remarks came after Nexperia's headquarters, located in Nijmegen, the Netherlands, suspended wafer supplies to the Dongguan facility starting on Oct 26. The move followed the Dutch government's decision in September to seize control of Nexperia from its Chinese parent company, Wingtech Technology, over so-called economic security concerns and suspend its CEO Zhang Xuezheng.

The China unit's statement said the justification given by Nexperia's headquarters for halting wafer supplies was "misleading and highly deceptive". It said the Chinese arm had not violated any contract terms and that the headquarters owed the Dongguan plant more than 1 billion yuan ($140 million) in unpaid bills.

The decision to halt wafer shipments is "an irresponsible act" and "completely disregards customer interests", the statement said, accusing the Dutch management of putting personal interests above the company's overall interest and severely damaging customers' trust.

In a written statement sent to China Daily on Oct 28, Nexperia said it "remains committed to our Chinese activities".

On Saturday, China's Ministry of Commerce said it is looking to exempt some Nexperia orders from an export ban, adding that it would comprehensively consider the actual situation of enterprises and grant exemptions to exports that meet relevant criteria.

The exemptions are being considered to stabilize the flow of Nexperia chips in global supply chains, the ministry said, encouraging affected companies to reach out and request such exemptions.

Xiang Ligang, an industry veteran and director-general of the Zhongguancun Modern Information Consumer Application Industry Technology Alliance, a telecom industry association, noted that Nexperia's most advanced production lines, including those for its new gallium nitride products, are based in China.

"This means that much of Nexperia's manufacturing capacity, especially its new and high-impact production capacity, is in China. The Netherlands has no substantive control over the company," he said.

"Most important, Nexperia products made in China are exported globally. Any impact on global automotive chip supplies will affect the chip supply chains in the Netherlands and other countries," he added.

The Nexperia issue has triggered a ripple effect across global supply chains. The European Automobile Manufacturers' Association warned that chip shortages linked to the Nexperia supply halt could soon lead to assembly-line shutdowns, as the affected semiconductors are used in key vehicle systems.

Sigrid de Vries, director-general of the association, said in a statement: "Automakers have taken steps to diversify supply chains, but risks cannot be mitigated down to zero. We suddenly find ourselves in this alarming situation. We really need quick and pragmatic solutions from all countries involved."

Zhang Zhouxiang in Brussels contributed to this story.

chengyu@chinadaily.com.cn