Nexperia pleads for cooperation amid supply chain crisis

Dutch chipmaker Nexperia has issued an urgent open letter to its Chinese units, pleading for their cooperation to restore normal supply chain operations. Despite repeated attempts by Nexperia's Dutch parent company to establish dialogue, the Chinese entities have not provided a clear response. With customers across industries reporting imminent production stoppages, Nexperia is urging its Chinese counterparts to engage in constructive negotiations to resolve the impasse and enable the continued flow of its products to global markets.

Nexperia's public appeal

Nexperia B.V., the Dutch chipmaker, made its plea public after exhausting conventional communication channels. The company has been actively seeking open dialogue with its Chinese entities to find a path toward restoring the regular supply of goods. These attempts included direct outreach via calls, emails, proposed meetings, and formal correspondence demanding the performance of rights. Despite these efforts, Nexperia reports a lack of meaningful response, compelling them to communicate publicly to underscore the urgency of the situation. The company is urging the leadership of Nexperia’s entities in China to take immediate steps toward structured negotiations, including restoring predictable supply flows without delay and aligning with corporate governance standards. This alignment would ensure that operations resume within the established governance framework and in accordance with lawful instructions from Nexperia B.V.’s global management.

Root of the dispute

The core of the issue traces back to September, when the Dutch government invoked a Cold War-era law, effectively seizing control of Nexperia. This action reportedly stemmed from security concerns raised by the U.S. Beijing responded by blocking Nexperia's products from leaving China, sparking alarm among global automakers already grappling with chip shortages. Although the Dutch government suspended its state intervention at Nexperia following talks with Chinese authorities last week, the underlying corporate structure and relationship with parent company Wingtech remain unresolved. Rico Luman, a senior sector economist at ING, notes that discussions are still ongoing to restore the corporate structure and relationship with Wingtech. The German Association of the Automotive Industry (VDA) has warned of elevated risks to supply, particularly for the first quarter of 2026.

Global implications and industry concerns

The disruption in Nexperia's supply chain has far-reaching consequences, particularly for the automotive industry. Nexperia produces billions of chips that are essential components in cars and other electronics. The shortages resulting from the dispute have already led to production slowdowns and halts. Companies like Nissan and Bosch have issued warnings about looming chip shortages directly linked to the Nexperia dispute. The situation is further complicated by the fact that Nexperia manufactures most of its wafers in Hamburg, Germany, and then ships them to Dongguan, China, for packaging and distribution to customers worldwide. This intricate supply chain highlights the interconnectedness of the global semiconductor industry and the potential for disruptions in one area to cascade across the entire system.

China and EU Involvement

Both China and the European Union are now advocating for a resolution at the corporate level. This shift in strategy follows video conferences between Chinese Commerce Minister Wang Wentao, German Economy Minister Katherina Reiche, and European Commissioner for Trade Maros Sefcovic. Chinese commerce authorities stated that both sides agree that Nexperia Netherlands and Nexperia China should promptly engage in constructive communication regarding their internal corporate disputes and find an effective, long-term solution. Wang Wentao acknowledged the fragility of the global semiconductor supply chain. He reiterated China's position that the Dutch government needs to revoke the executive order and withdraw the court ruling, despite suspending the executive order, which Beijing views as the root causes of the issue. In their call, Wang and Sefcovic pledged to jointly urge the entities to start a dialogue and work towards restoring stability to the global semiconductor supply chain.