As the world faces a possible shortage of oil and gas due to the war with Iran, the Nexperia crisis reopens, the semiconductor company headquartered in the Netherlands but controlled by a Chinese company.
The Chinese Ministry of Commerce has indeed spoken of “new conflicts” between Nexperia and its Chinese subsidiary, which could have repercussions on microchip supplies. The automotive industry is particularly exposed, being a major user of Nexperia components for control units and other electronic systems in vehicles.
WHERE THE NEXPERIA CRISIS ORIGINATES
On September 30, the Dutch government took control of Nexperia, officially to prevent possible transfers of technology and production to China. Beijing had denounced the “seizure” of the company to the detriment of the parent group, Wingtech, deciding to impose restrictions on exports of finished microchips: it is true that most of Nexperia’s semiconductor manufacturing takes place in Europe, but the final packaging phase occurs on Chinese territory.
The intervention by the Dutch government was linked to the fact that Wingtech had been placed by the United States on a “blacklist” accused of helping the Chinese government acquire sensitive technologies for microchip manufacturing, a sector in which the country is behind. The trade restrictions applied to Wingtech were then extended to Nexperia, as its subsidiary.
At that point, to prevent the risk that Nexperia would transfer all its activities to China and leave Europe “exposed,” the Netherlands decided to take control, referring to a law from the 1950s: they suspended the executive director, placed the shares under custody, and secured the ability to block or revoke decisions of the board of directors.
WHAT HAS HAPPENED AGAIN
The Nexperia crisis eased at the end of last November – the Netherlands stepped back and China relaxed export controls – but it did not resolve definitively. On the contrary, according to Reuters, the conflicts between the Dutch headquarters and the Chinese subsidiary “have only intensified.”
The situation worsened again after Nexperia’s Chinese subsidiary, which handles microchip packaging, accused the headquarters of having deactivated the corporate accounts of all employees in China. On this matter, the Chinese Ministry of Commerce accused Nexperia Netherlands of having “seriously compromised the normal production and operation of the company. If this should again cause a global crisis in semiconductor production and supply chains, the Netherlands will have to take full responsibility.”
Nexperia did not deny the account deactivation but denied that this decision had negative repercussions on packaging operations in China. The frictions between the Dutch headquarters and the Chinese subsidiary are due to the latter’s decision to declare itself independent after the Dutch government’s action against Wingtech.
AUTOMAKERS MOST EXPOSED TO NEXPERIA
One of the automakers most exposed to the Nexperia crisis is the German Volkswagen, which months ago had considered suspending production of the Golf and Tiguan models. The Italo-French Stellantis, instead, had created a war room – a sort of temporary crisis unit – to monitor microchip supplies. Meanwhile, the Japanese company Honda had even revised its profit forecasts downward after having to suspend production at several plants.
The semiconductors made by Nexperia are not particularly sophisticated but are widespread in the automotive sector: a single vehicle can contain hundreds of them; they are used to operate switches or steering wheel controls, among other purposes.
