The chipmaker is seeking chip packaging partners outside China as the dispute drags on
[BEIJING/TAIPEI] Dutch chipmaker Nexperia’s Chinese unit has resumed supplying semiconductors to local distributors, according to two people briefed on the matter, having previously halted all shipments when Beijing banned exports following an ownership dispute.
But as part of the resumption, which is confined to domestic trade, all sales to distributors must now be settled in Chinese renminbi, the people said, whereas transactions had previously only used foreign currencies such as the US dollar.
The Chinese unit also instructed distributors to transact with their customers only in renminbi, in an apparent bid to stabilise supply in China and operate more independently from its Dutch parent, one of the people said.
Nexperia, now under Dutch government control, produces large volumes of chips in the Netherlands widely used in the automotive industry and consumer electronics. The majority are packaged in China and sold mostly to distributors.
Nexperia is now seeking alternative packaging partners outside China as the dispute with its Chinese subsidiary shows little sign of a quick resolution, the people said.
Nexperia has also warned customers in China that it does not guarantee the quality of products sourced from its Chinese subsidiary, the second person said.
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They spoke on condition of anonymity because of the sensitivity of the matter. The temporary sales halt and the resumption with settlements in yuan had not been reported previously.
A Nexperia spokesperson declined to comment on the actions of its Chinese unit and said its efforts to seek packaging partners outside China predated the dispute and were not part of a move away from its Chinese factory.
On quality, the spokesperson said it had to inform customers of potential risks, but it had stopped short of saying they should not buy from its Chinese unit.
Nexperia’s Chinese unit did not respond to a request for comment. After the Reuters story about it resuming sales was published on Thursday, it issued a statement on its WeChat account that said it was operating independently and its “manufacturing and business activities are proceeding in an orderly manner”.
The unit also accused its Dutch parent of raising “groundless doubt” on product compliance and said it would pursue legal options.
Dutch government seizes control
The Dutch government took control of Nexperia on Sep 30 and removed its Chinese CEO, Zhang Xuezheng, citing concerns its technology might be appropriated by Nexperia’s Chinese parent, Wingtech Technology.
Court filings showed that the seizure came after rising US pressure on Nexperia after Wingtech was placed on a restricted export list, though Dutch authorities say governance shortcomings were the trigger.
On Oct 4, China’s commerce ministry blocked Nexperia from exporting chips from China.
Following the order, Nexperia’s Chinese unit suspended shipments from its main Dongguan factory to all distributors, the first person said.
The dispute has fuelled concerns about supply chain disruptions across the global auto industry. Nexperia is one of the largest makers globally of basic chips that are not technically sophisticated but are needed in large volumes.
On Thursday, the Japan Automobile Manufacturers Association said Japanese automobile component makers had been notified by a Dutch semiconductor manufacturer that it may not be able to guarantee chip deliveries, which could seriously impact global production.
The German economy ministry said on Wednesday it would have a call with automakers and suppliers to discuss developments related to Nexperia. On Tuesday, the Dutch economy minister said he had spoken with his Chinese counterpart but failed to reach a solution. REUTERS
