Nexperia dispute deepens as China unit launches independent chip production

According to a report by Reuters on March 9, Nexperia China said it has started manufacturing several types of chips that are also produced by the Dutch parent company. The Chinese subsidiary stated that the devices are being produced using 12-inch wafers – which Nexperia currently does not manufacture in Europe.

The development marks a further step toward operational independence by the Chinese unit, Reuters reported, amid a dispute that has already affected semiconductor supply chains for the automotive industry.

Conflict escalates

The standoff dates back to October 2025, when the Dutch government intervened to prevent Nexperia from shifting operations to China. Following the intervention, the company’s Chinese subsidiary declared itself independent while the European headquarters halted wafer shipments to China, citing nonpayment.

Prior to the dispute, wafers were produced in Europe and shipped to China for assembly and testing.

Reuters reported that the Chinese unit said it has begun producing bipolar discrete devices, Schottky rectifiers and electrostatic discharge devices – relatively simple semiconductor components that are widely used in electronics and automotive systems.

The Chinese subsidiary did not specify where it is sourcing the 12-inch wafers used in production. Reuters noted that Wingtech founder Zhang Xuezheng controls WingSkySemi, a 12-inch wafer fabrication facility in Shanghai that had previously cooperated with Nexperia before the dispute began.

Beijing warns of supply chain risks

In a separate report published March 7, Reuters said China’s Ministry of Commerce warned the conflict could potentially trigger renewed disruptions in global semiconductor supply chains.

The ministry raised the concern after Nexperia’s Chinese packaging unit accused the Netherlands-based headquarters of disabling office IT accounts for employees in China, Reuters reported.

According to the ministry’s statement cited by Reuters, such actions could create “new difficulties and obstacles” for negotiations between the parties and risk disrupting semiconductor production if the dispute escalates further.

Nexperia rejects IT allegations

In a press release, Nexperia rejected claims from the Chinese subsidiary that production had been halted due to restricted IT access.

The company said the Chinese entity’s management had initiated several actions to separate its IT environment from the global Nexperia network, including the creation of unauthorised email systems and moving company devices to non-Nexperia network domains.

According to Nexperia, the company implemented protective IT measures to maintain compliance with corporate security and governance standards. The measures did not affect manufacturing systems and had no adverse impact on production capability, the company said in the statement.

Nexperia also called on the management of Wingtech and Nexperia China to engage in constructive dialogue to resolve the dispute.

Efforts by authorities in China, the Netherlands and the European Union to mediate the dispute have so far failed to produce a resolution.