Who's Disrupting Global Chip Supply Chain?

Dutch chipmaker Nexperia has suspended wafer supplies to its Chinese assembly plant in Dongguan, Guangdong province in south China, as of October 26, citing the factory's "failure to comply with agreed contractual payment terms."

Nexperia China strongly rejected the allegation, saying it was "completely fabricated and a deliberate attempt to discredit" the Chinese management.

"There has been no breach of contract on our side," the company said in its statement on November 1. On the contrary, Nexperia's Dutch company owes the Dongguan facility payments totaling about one billion RMB, the company added.

At the end of September, the Dutch government interfered in the normal operation of Nexperia, owned by China's Wingtech Technology Co., Ltd., forcibly replacing its management team under the banner of protecting the "economic security of the Netherlands and the EU."

The move triggered a crisis in the chip supply chain across Europe and even the world.

According to multiple media reports, Nexperia is a key supplier for automakers such as Volkswagen, Mercedes-Benz and Volvo. The crisis provoked by the Dutch government has already extended the delivery cycle of related products from 12 weeks to over 20 weeks, with the prices of some chip components surging tenfold.

Several automakers, including Japanese carmaker Nissan, have announced that they are facing chip supply difficulties, with inventories nearing depletion and production cuts looming.

Against this backdrop, Nexperia has nevertheless chosen to further "double down" by halting wafer supplies to its packaging and testing plant in Dongguan — an act that is undoubtedly inflicting additional harm on the already fragile global chip supply chain.

The Guardian and Reuters reported that Nexperia's move "threatens to halt production at carmakers around the world" and disrupt inexpensive chip supply. Euronews commented that the decision is "raising the risk of fresh supply disruptions for Europe's biggest carmakers," while German news outlet DPA-AFX expressed concern that Nexperia's delivery problems could increase, severely impacting Germany's automotive industry.

China will not accept the unjustified interference by a foreign government in a Chinese-funded enterprise and has both the right and the capability to take corresponding countermeasures. Fielding questions on the Nexperia issue, a spokesperson for China's Ministry of Commerce stated that as a responsible major country, China fully considers the security and stability of domestic and global industrial and supply chains. It welcomes enterprises facing practical difficulties to contact the ministry or local commerce authorities. The ministry will comprehensively assess each enterprise's specific circumstances and grant exemptions to those that meet the eligibility criteria.

On one side are those who create, ignore and escalate crises; on the other side are those who act responsibly to safeguard the stability and security of industrial and supply chains. It is clear who the true disruptor of the global chip supply chain is. There is no doubt that in this unnecessary crisis, it is the Netherlands — not China — that bears the responsibility.

After being acquired by Chinese investors, Nexperia has seen rapid growth in both production capacity and profits, with its revenue reaching 14.7 billion RMB in 2024. Its strong performance has benefited not only from the management by the Chinese team but also from China's market demand driven by emerging industries and the nation's robust manufacturing ecosystem.

The most responsible course of action for the Netherlands would be to end its intervention and allow the company to return to a healthy development path.

Source: Science and Technology Daily