The Chinese subsidiary of chipmaker Nexperia has resumed deliveries to local distributors. However, there have been significant changes: sales are now only permitted for the domestic Chinese market, and all transactions must be settled in yuan.
This is according to Reuters, based on sources. Distributors are also required to have their own customers pay in yuan, a development that follows China’s export ban due to a property dispute.
According to insiders, the Chinese subsidiary has completely revamped its sales policy. Whereas transactions were previously conducted exclusively in foreign currencies such as US dollars, all sales must now be made in Chinese yuan. This requirement applies not only to direct distributors but also to their customers, who must pay in Chinese currency.
This strategy appears to be aimed at making Chinese operations more independent from the Dutch parent company. Sources indicate that deliveries were initially entirely halted after the Chinese export ban before this new approach was introduced.
Dutch government intervention as the starting point of conflict
The situation arose after the Dutch government took control of Nexperia on September 30 and removed Chinese CEO Zhang Xuezheng. The government expressed concern that technology could be appropriated by the Chinese parent company Wingtech Technology. Court documents show that the takeover occurred after increased US pressure, following the placement of Wingtech on an export restriction list.
In response, on October 4, the Chinese Ministry of Commerce blocked the export of Nexperia chips from China. Immediately afterwards, the Chinese subsidiary suspended all deliveries from the Dongguan factory to distributors, after which the resumption, in a modified form, now follows.
Nexperia, one of the world’s largest manufacturers of basic chips, produces large volumes of chips in the Netherlands that are widely used in the automotive and consumer electronics industries. The majority are packaged in China and sold mainly through distributors.