Nexperia Netherlands has completely stopped exporting wafers to the manufacturer’s Chinese assembly plant. This could have major consequences for the automotive industry, among others, which is mainly dependent on the manufacturer.
Information about this has been seen by the Reuters news agency. The letter, dated Wednesday, October 29, is signed by Stefan Tilger, interim CEO of Nexperia. The export ban on wafers was imposed on October 26 and resulted from local management’s recent failure to comply with the agreed contractual payment terms.
Such a wafer can be considered the basis for an actual chip. In the Netherlands, these wafers are manufactured and typically exported to Nexperia’s Chinese factories, where they serve as the basis for the chips it produces. Often, pure silicon is used as a substrate for electronic components.
Simply put, it is a mess at the Dutch chip manufacturer, which was taken over by the Chinese company Wingtech a few years ago. Tilger has been appointed as the company’s temporary CEO after the Chinese CEO was dismissed. Among other things, he is alleged to have stolen trade secrets and passed them on to a Chinese company of which he is also the owner.
A story with no end in sight
It remains to be seen when this soap opera will end. The Dutch government is in talkswith China about next steps, involving outgoing Minister of Economic Affairs Vincent Karremans. Nexperia has been in the news for weeks now, starting when the Dutch government intervened at Nexperia.
The Goods Availability Act was then invoked, and in response, the Chinese government acted againby imposing an export ban on products from Chinese factories. This, in turn, caused a great deal of unrest among European and American car manufacturers, among others. Nexperia Netherlands’ decision only adds to this unrest, as manufacturers now have no bright prospects whatsoever for the supply of the necessary chips.
Volkswagen, among others, uses Nexperia chips, around 2,000 per vehicle. The company has announced that it has enough Nexperia chips in stock until the end of next week to continue production as normal. The company says it does not want to speculate on the consequences if this stock does indeed run out. The manufacturer has previously said that it is in talks with a supplier of alternative chips, but whether and when that deal will be finalized is still unknown.