A significant dispute continues to unfold within Nexperia, the Dutch chipmaker owned by Chinese firm Wingtech Technology Co., despite efforts by Beijing to restore supplies of critical automotive components. The internal feud centers on accusations of production interference and the supply of wafers, with broader geopolitical implications for the global semiconductor supply chain.

Nexperia's management, based in Nijmegen, Netherlands, firmly rejected claims from its Chinese unit that it was intentionally blocking wafer supplies. On Friday, the company issued a statement asserting, "Nexperia China should be in the possession of a sufficient amount of wafers and finished products available to continue operations for several months." The statement further raised "serious doubt over stock management practices by local management," implying mismanagement on the Chinese subsidiary's part. This refutation followed an internal communication from Nexperia's Chinese subsidiary to its employees, alleging that Dutch management was indeed obstructing supplies, failing to allocate necessary funds, and withholding operational support.

The conflict escalated after the Dutch government intervened in September, assuming control over key strategic decisions at Nexperia. This intervention was prompted by concerns that Wingtech founder Zhang Xuezheng, who also served as Nexperia's chief executive officer, was engaging in asset-stripping for the benefit of his other businesses, thereby threatening the crucial supply of chips to European industries. In response to the Dutch government's actions, Beijing retaliated by imposing restrictions on the export of Nexperia's products from China. This move led to a severe shortage of vital power-control chips, which are essential for automakers such as BMW AG and Volkswagen AG, causing significant disruptions to car production across Europe and other regions.

While the Dutch government's intervention led to Zhang Xuezheng's suspension as CEO by an Amsterdam court in October, Wingtech has vehemently denied the allegations of asset-stripping and has called for his reinstatement. Amidst these internal and external pressures, negotiations between the Netherlands and China have progressed in recent weeks, with Beijing authorities facilitating a partial resumption of exports from Nexperia’s Chinese facilities. However, Nexperia clarified that this represents only "a relaxation of export restrictions by means of exemptions rather than a full restoration of the supply chain."

Nexperia operates fabrication facilities in Germany and the UK, which produce wafers that are then shipped for testing and assembly to sites in China, Malaysia, and the Philippines, before many are returned to Europe. Its plant in Guangdong, China, is recognized as one of the largest of its kind globally. To mitigate the ongoing supply disruptions, the Dutch firm has actively pursued alternative solutions, including directly selling and shipping wafers to its customers. Nexperia has committed to sustaining these "workaround solutions for as long as necessary and until a normal supply chain with a full turnkey flow can be restored." Looking ahead, the company also plans to expand its production capacity at other international locations, with phased developments expected over the course of 2026.

Despite some technical advancements in resolving the chip shortage, the political dimension of the conflict remains fraught. China's Ministry of Commerce expressed strong disappointment and dissatisfaction on Friday regarding recent comments made by Dutch Minister of Economic Affairs Vincent Karremans. The ministry deemed his remarks as "misleading, distorted and willful" ahead of planned talks in Beijing. Karremans had stated in an interview that he "would have done the same thing again" to assert control over the Chinese-owned chipmaker, which Beijing’s spokesperson argued had turned the once-stable global chip supply chain into chaos. A delegation from the Netherlands is scheduled to visit Beijing early next week in an effort to find a "mutually agreeable" resolution to the complex Nexperia issue.