AMSTERDAM / LONDON (IT BOLTWISE) – The Dutch government has suspended its control over chipmaker Nexperia in what is seen as a goodwill gesture toward China. The conflict over chip production had put pressure on the global automotive industry as important deliveries stalled. Now the situation seems to be easing, but uncertainties remain.
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The Dutch government has decided to suspend its control over chipmaker Nexperia and return powers to Chinese parent company Wingtech. The move is being interpreted as a goodwill gesture toward China after the conflict over chip production put pressure on the global automotive industry. The Dutch government took control at the end of September to prevent important technologies and production capacity from being relocated to Asia.
Nexperia is a major manufacturer of so-called ‘legacy’ chips, which are of great importance to the automotive industry. The company produces over 100 billion components annually, around 60 percent of which are used in the automotive sector. The components such as diodes, transistors and MOSFETs can be found in almost all vehicle systems. It is estimated that every third car contains between 500 and 3,000 Nexperia components.
In response to the Dutch measure, China restricted the export of components from the Nexperia factory in Guangdong. This plant is one of the largest sites of its kind in the world and accounted for around half of the production volume before the crisis. The export restrictions caused significant problems in automobile production, as companies such as Volkswagen and Honda faced production halts.
After international negotiations involving the Netherlands, China, Germany, the EU and the US, China agreed to ease export restrictions. The first car manufacturers have already received deliveries, and both Volkswagen and Honda announced that they would ramp up production again. However, the situation remains tense as the Dutch government reserves the right to retake control if it again feels that supplies may be at risk.
The conflict over Nexperia shows how fragile global supply chains are and how quickly political tensions can affect production. The lesson for the automotive industry remains that dependence on individual suppliers entails considerable risks. The Dutch government emphasizes that Nexperia remains obliged to provide certain information, in particular regarding the transfer of production resources or intellectual property.
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