Nexperia’s China unit says it has ‘sufficient inventories’ after Dutch parent’s supply suspension

BEIJING, China – Dutch chipmaker Nexperia’s China unit said on Sunday, November 2, that it had established “sufficient inventories of finished goods and work-in-progress” and that its supply chain remained secure and stable after its parent halted wafer supplies.

The Dutch company suspended supplies of wafers to its Chinese assembly plant on October 26, calling it “a direct consequence of the local management’s recent failure to comply with the agreed contractual payment terms,” Reuters reported on Friday.

Its China unit called Nexperia’s suspension “unilateral” and “extremely irresponsible”, adding the Dutch parent’s claim about contractual payment was “misleading and highly deceptive”, according to a statement Nexperia China released early on Sunday.

Nexperia China had asserted it had the right to operate independently of Nexperia Netherlands after Dutch authorities in September took over control of Nexperia from its Chinese owner Wingtech, citing concerns about possible technology transfers.

Beijing responded by blocking the company’s products from leaving China.

“We have proactively initiated multiple contingency plans and are accelerating the qualification of new wafer supply sources,” the Chinese unit said on Sunday on its Chinese social media account, adding that it expected to meet all customers’ demands starting next year.

Existing inventories would sustain the Chinese unit’s order fulfilment “through year-end and beyond,” it added.

Nexperia makes basic, inexpensive power-control chips such as transistors and diodes that cost only a few cents to buy.

However, such chips are needed in almost every device that uses electricity, and automakers that use Nexperia’s chips have also warned of potential production disruptions.

The White House is expected to announce that Nexperia’s China facilities will resume shipments, Reuters reported on Friday, after a trade truce was struck at a summit between US President Donald Trump and his Chinese counterpart Xi Jinping in South Korea.

China’s commerce ministry said on Saturday it would consider exemptions for Nexperia’s chip exports from the country. – Rappler.com