Nexperia Suspends Wafer Supplies to Chinese Plant Amid Contract Dispute
GeokHub
Contributing Writer
Dutch chipmaker Nexperia has halted wafer deliveries to its Chinese assembly plant in Dongguan, citing contractual breaches by local management—a move that threatens to aggravate global semiconductor shortages, especially in the automotive industry.
A letter to customers, dated October 29, said the supply cut began on October 26, triggered by claims that the plant’s leadership failed to meet agreed payment obligations. Nexperia’s interim CEO emphasized that the suspension will remain in effect until all contractual terms are satisfied.
The move follows a recent takeover of Nexperia by the Dutch government, which seized control from its Chinese owner, Wingtech, over national security and governance concerns. Simultaneously, China has already blocked exports from the company’s Chinese operations, citing export control measures.
While defense officials say Nexperia isn’t pulling out of the Chinese market, the company is exploring alternative supply paths to mitigate disruption. However, the timing puts pressure on automakers globally, who depend on Nexperia’s chips for low-cost but critical vehicle systems like sensors, controls, and power modules.
Automakers are already sounding alarms. Some firms report they may exhaust certain chip reserves by early November if the suspension continues. In Europe, manufacturers including Stellantis and Nissan have activated crisis teams to monitor the situation and explore alternate suppliers. A ripple effect through global supply chains could lead to factory slowdowns or halted production.
Industry insiders note that while wafer cuts affect just one part of the chip production chain, Nexperia’s scale and low-cost components make it difficult for automakers to pivot quickly to substitutes without risking delays, qualification constraints, or higher costs.
