According to the news on Friday (October 31), Dutch chip manufacturer Nexperia has temporarily suspended supplying wafers to its assembly plant in China. Nexperia stated that this decision was due to the subsidiary under its parent company Wintech Technology not complying with the agreed contract payment terms.
Nexperia’s interim CEO Stefan Tilger, in a letter to customers on October 29, mentioned that the company had halted supplies to its factory in Dongguan, Guangdong on October 26. This move is seen as a further escalation of the dispute between the Dutch government and Nexperia’s Chinese parent company, Wingtech Technology.
The letter explicitly stated that the supply cut was a direct result of the local management’s recent failure to comply with the agreed contract payment terms.
Nexperia produces a large number of chips in the Netherlands and Germany, with about 70% of them undergoing packaging and testing in Dongguan, primarily supplying distributors in the automotive and consumer electronics industries.
The dispute between Nexperia and its Chinese subsidiary stems from the Dutch government’s takeover of Nexperia on September 30, freeing it from Wingtech Technology’s control.
Following this takeover, the Amsterdam court dismissed Nexperia’s CEO, Zhang Xuezheng, over concerns that the technology could be misused by Wingtech, jeopardizing the supply of key components. Zhang Xuezheng, aged 50, is also the founder and CEO of Wingtech Technology.
Informants revealed to Dutch media that Zhang Xuezheng had planned to relocate Nexperia’s European wafer production, located in the UK and Germany, to Shanghai Dingtai Jianshi Microelectronics, a subsidiary of Wingtech, in an attempt to transfer the core European technology to China.
Wingtech Technology requested on Thursday the reinstatement of Zhang Xuezheng to resolve the dispute and denied allegations of “technology theft” against him.
Even before the wafer supply cut, the dispute had led to a series of trade restrictions and legal actions:
Chinese Export Controls:
Following the Dutch government’s takeover, the Chinese Ministry of Commerce issued an export control order on October 4, preventing Nexperia from exporting chips from China. This resulted in the factory temporarily halting shipments abroad, and the chips could not be delivered to customers outside of China.
Change in Settlement Terms:
In response to the Chinese export ban, Nexperia’s Chinese subsidiary unilaterally mandated that all sales to distributors must be settled in Chinese Yuan, rather than previously used currencies like the US dollar, seen as a major point of friction leading to internal payment disputes.
U.S. Export Restrictions:
This dispute occurs against the backdrop of the U.S. expanding export controls on Wingtech Technology. Wingtech Technology itself was placed on the export restriction list by the U.S. government in December 2024, and the Bureau of Industry and Security (BIS) further expanded the controls at the end of September 2025, subjecting subsidiaries holding over 50% shares of Wingtech Technology, such as Nexperia, to restrictions as well.
A spokesperson for the Dutch government told Reuters that the wafer supply cut was a decision at the corporate level, and state intervention is about “maintaining production capacity, not targeting the company’s daily operations.” The spokesperson mentioned that the Netherlands is in discussions with governments of European countries, the European Commission, and Chinese authorities in efforts to achieve a constructive solution.
European Trade Commissioner Maros Sefcovic stated at a press conference in Rome on Friday that they are working with the Netherlands, the European Commission, and Chinese counterparts to find the “best solutions” and restore supplies as soon as possible.
Informants revealed that the prices of some Nexperia products have increased more than tenfold within two weeks.
Nexperia mentioned that the decision to cut supplies does not signify exiting the Chinese market, as the company is still committed to seeking solutions and developing alternative measures to ensure the supply to customers is sustained.