On Wednesday, November 5th, Nexperia, a Dutch semiconductor company, announced that it has temporarily suspended direct wafer supplies to a Chinese plant after the factory refused to make payments. The factory also engaged in other misconduct, including unauthorized use of official stamps and unauthorized collection of payments.
The Dutch company, owned by the Chinese company Wingtech Technology Co., Ltd., supplies power control chips to automakers such as BMW and Volkswagen. Nexperia notified its customers on October 29th that it would cease direct wafer supplies to its assembly plant in China, which previously accounted for about half of its total output.
In a statement, Nexperia stated that due to disagreements with Beijing, its entity in China, “Nexperia China,” has ceased operation in accordance with the policies of the headquarters and has ignored the legitimate instructions of the corporate management.
Nexperia mentioned that they are currently unable to effectively supervise the delivery events and progress of the Chinese factory’s products and cannot guarantee the compliance of the chips delivered from the factory since October 13 in terms of intellectual property, technology, authenticity, and quality standards due to lack of transparency and oversight in the manufacturing process.
The statement also revealed a series of internal conflicts between the headquarters and the Chinese subsidiary.
Due to Nexperia China’s refusal to pay for the wafers, the headquarters had to announce on October 29 that it would have to suspend further direct wafer supplies to the Chinese factory.
The statement pointed out that the non-payment was not an isolated incident and cited other examples, including the unauthorized use of the company’s official stamps without lawful reasons or explanations, opening unauthorized bank accounts and instructing customers to transfer funds to these accounts, as well as sending unauthorized letters containing false information to customers, contract manufacturers, third-party suppliers, and employees.
Representatives of Wingtech Technology have not yet commented on the matter.
In order to fulfill orders as much as possible, Nexperia is still shipping wafers to other factories. The company also has assembly plants in Malaysia and the Philippines.
Nexperia stated in the announcement that they are providing alternative supply chain solutions to minimize supply disruptions and maintain delivery continuity. Besides China, all Nexperia factories in Europe and other parts of Asia are running normally.
The statement emphasized that all Nexperia products outside of China use Nexperia original wafers and approved materials, strictly adhere to Nexperia standards and specifications, manufacturing processes, quality systems, and incorporate Nexperia intellectual property.
Nexperia stated, “These products are fully genuine and compliant, have been continuously delivered, and will continue to be delivered to customers.”
Nexperia expressed the hope to alleviate the situation as soon as possible, as it is in the best interests of all parties involved.
The statement noted rumors and media speculation about Zhang Xuezhen resuming his CEO position, and Nexperia confirmed that “according to the ruling of the Dutch Enterprise Chamber on October 7, 2025, Zhang Xuezhen has been suspended from the position of director and no longer serves as CEO of Nexperia.”
Additionally, the Enterprise Chamber ruled that almost all of the voting rights of the Nexperia shares indirectly held by Wingtech Technology have been taken over by an independent administrator appointed by the Enterprise Chamber.
The statement dismissed any claims to the contrary as false.
Nexperia stated that it will continue to fully comply with the orders of the Dutch government. The orders aim to safeguard Nexperia’s production capacity and technology in Europe without affecting normal production or daily operations. However, strategic decisions concerning Nexperia’s assets and personnel that may impact the company, such as relocating parts of the business or dismissing executives, require government approval and will be in effect for one year.
Meanwhile, Nexperia welcomed the U.S. authorities’ one-year suspension of the implementation of the “Piercing Rule.” This rule was initially intended to extend U.S. export control restrictions to subsidiaries in which entities on the U.S. Entity List hold 50% or more ownership.
As a wholly-owned subsidiary of Wingtech Technology, Nexperia theoretically would have been affected by this rule. This is because Wingtech Technology was added to the Entity List in December 2024.
The statement stated, “We also welcome China’s commitment to facilitate the resumption of exports from Nexperia’s China factory and its contract manufacturers, ensuring that critical mature process chips continue to flow to the global market. We look forward to learning more details about the conditions, standards, and procedures for relaxing export restrictions as soon as possible.”