Nexperia halts wafer supplies to China
The latest development in ongoing tensions between Nexperia’s Netherlands headquarters and its Chinese subsidiary has led the company to suspend wafer shipments to its assembly plant in Dongguan, Guangdong province, according to a letter reviewed by Reuters – potentially worsening global chip shortages in the automotive sector.
The letter sent to Nexperia customers, dated October 29 and signed by interim CEO Stefan Tilger, states that the supply halt is “a direct consequence of the local management’s recent failure to comply with the agreed contractual payment terms.”
The move comes amid a dispute following the Dutch government’s takeover of Nexperia, which also included the removal of the company’s Chinese CEO over concerns about technology security. Since then, the Chinese unit had resumed local shipments, but sales to distributors were required to be in Chinese yuan rather than foreign currencies like the US dollar.
European production, Chinese packaging
As previously reported, Nexperia produces large volumes of chips in the Netherlands for the automotive and consumer electronics sectors. According to Reuters, approximately 70% of these European-manufactured chips are packaged in China before being distributed.
The letter emphasised that continued shipments were no longer commercially sustainable under current conditions.
"Unless these contractual obligations are fully satisfied, we cannot resume wafer supply to the site. Nexperia is developing alternative solutions to ensure (that) supply (is) continuing to our customers," the report continues.
The company clarified that the suspension does not indicate an exit from its Dongguan plant or the broader Chinese market and stressed that it operates financially independently of Wingtech.
A spokesperson for Nexperia confirmed the letter’s authenticity to Reuters but declined to comment further.
