Crisis at Nexperia: chip quality cannot be guaranteed

"The Dutch manufacturer is facing a crisis following government measures and Chinese export restrictions. The Dutch chip company Nexperia finds itself in a complex situation. On September 30, the Dutch government intervened by taking control of the company. Shortly thereafter, Beijing imposed export restrictions. This disruption is severely affecting the production chain, because although 70 percent of Nexperia's chips are made in Europe, they are packaged and distributed in China."

"The measures follow revelations about possible chip knowledge leaks to China. The Dutch government took control due to concerns about the intentions of Chinese parent company Wingtech. A Dutch court then removed CEO Zhang Xuezheng from his position. Nexperia confirmed on Thursday that factories outside China will continue to operate normally. "We remain fully committed to our operations in China," the company said. The facilities in Malaysia and the Philippines process the remaining 30 percent of production."

"An American deal offers some breathing space. Nexperia reports that the company will not be subject to American export restrictions for a year. China has also agreed to look at export opportunities on a case-by-case basis. However, these concessions are temporary and do not offer a structural solution. The Chinese authorities accuse the Netherlands of failing to engage constructively. Beijing warns that further supply chain disruptions are inevitable without concessions from the Netherlands."

Nexperia warned customers that products packaged in China after October 13 may be inauthentic or not meet quality requirements. The Dutch government took control of Nexperia on September 30 over concerns about leaks and intentions of Chinese parent Wingtech. Beijing then imposed export restrictions, disrupting packaging and distribution since about 70 percent of chips are made in Europe but packaged in China. A Dutch court removed CEO Zhang Xuezheng. Factories outside China, including Malaysia and the Philippines, will continue operating and handle roughly 30 percent of production. A U.S. agreement suspends American export restrictions for one year while China considers exports case-by-case, and diplomatic talks continue without a long-term solution.

Read at Techzine Global