Nexperia’s decision to suspend wafer shipments to its Chinese plant could exacerbate the global semiconductor shortage, affecting automakers and electronics manufacturers. What does this mean for the future of chip supply chains?
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| Nexperia halts wafer shipments to China’s Dongguan facility, signaling potential consequences for global semiconductor supply chains. Image: CH |
Amsterdam, Netherlands — November 1, 2025:
Dutch semiconductor manufacturer Nexperia has suspended shipments of wafers to its assembly plant in Dongguan, China, intensifying concerns about the global chip shortage. This disruption, which affects a facility crucial for packaging and distributing semiconductors globally, raises questions about the long-term stability of semiconductor supply chains already under strain.
The decision, effective October 26, comes after Nexperia’s management cited the subsidiary’s failure to meet contractual payment terms. It follows a series of events that began on September 30, when the Dutch government seized control of Nexperia from its Chinese owner, Wingtech Technology, amid concerns over national security and the potential transfer of sensitive technology. This action has since sparked a diplomatic and economic standoff between the Netherlands and China.
The halt in shipments, outlined in an internal company letter signed by interim CEO Stefan Tilger, could have significant ramifications for industries dependent on Nexperia’s chips—especially automakers and consumer electronics manufacturers who are already grappling with the ongoing global semiconductor crisis. With around 70% of Nexperia’s European-made semiconductors packaged in China, the plant’s closure is disrupting a crucial node in the global supply chain.
Nexperia’s troubles stem from the broader geopolitical tensions surrounding the semiconductor sector. The Dutch government’s intervention was prompted by escalating pressure from the U.S., which placed Wingtech on a restricted export list. This, combined with concerns over the transfer of critical technology, led to the government’s decision to take control of the company. Subsequently, China retaliated by blocking Nexperia from exporting chips from its Chinese facility, further exacerbating the issue.
In the wake of the Dutch intervention, Nexperia’s Chinese unit resumed operations but insisted on settling transactions in Chinese yuan, instead of foreign currencies like the U.S. dollar. The company’s refusal to continue fulfilling wafer shipments unless its contractual obligations are met underscores the growing tensions between the parent company and the subsidiary, as well as between China and the Netherlands.
This move is more than just a corporate decision—it has significant implications for global supply chains, especially for industries reliant on Nexperia’s components. The semiconductor shortage, which has already affected car manufacturers, electronics producers, and tech companies worldwide, could deepen as a result of the suspension. Major automakers such as Stellantis and Nissan have expressed concern, with Stellantis setting up a "war room" to track the situation. While Nissan has stockpiled enough chips to continue production until early November, the growing uncertainty suggests that the disruption could extend well beyond that.
Not only does the suspension threaten the supply of essential chips, such as power semiconductors and microcontrollers, but it also drives up component prices. According to reports, the cost of some Nexperia components has surged from a few Chinese cents to over two yuan—an increase of more than 10 times. This price spike further strains already tight margins for manufacturers who are battling increased production costs.
The Dutch government, while distancing itself from the corporate decision to halt shipments, has emphasized that the country’s intervention was focused solely on safeguarding production capacity. Talks between European and Chinese authorities are ongoing, with Dutch officials optimistic about reaching a diplomatic resolution. European tech leaders, including Henna Virkkunen, have met with Nexperia executives to explore both short- and long-term measures to ease pressure on European manufacturers.
However, the path to resolution is fraught with complexity. Court filings reveal that the Dutch government’s takeover was triggered by growing U.S. scrutiny of Wingtech’s involvement with Nexperia. In retaliation, China blocked Nexperia from exporting chips, further complicating any efforts to bridge the divide between the two countries.
As negotiations continue, the question remains: will Nexperia be able to resolve its internal conflicts with its Chinese operations, and what role will the Dutch government play in brokering a solution that satisfies all parties? For now, the semiconductor shortage is poised to persist, as automakers and tech firms brace for continued uncertainty in their supply chains.
The suspension of wafer shipments from Nexperia is a stark reminder of how fragile global supply chains can be, particularly in industries as critical as semiconductor manufacturing. With geopolitical tensions influencing corporate strategies, and the continued pressure of global demand for chips, industries worldwide will be watching closely to see how this conflict unfolds.
For now, Nexperia’s commitment to its Dongguan operations offers a glimmer of hope that the dispute can be resolved. However, the potential for further disruptions in the semiconductor sector remains high, making it clear that securing supply chains and navigating international tensions will be central to the stability of the global tech industry in the years to come.