Nexperia Chips Snub China, Threatens Global Auto Production as EU Steps In
In a move that further escalates tensions between Europe and China, Nexperia, the EU-based chipmaker at the heart of a diplomatic row, has suspended supplies to its Chinese factory. This development has sent shockwaves through the global auto industry, with carmakers worldwide warning of production disruptions due to shortages of key components.
Nexperia's move comes after the Netherlands used national security laws to take control of the company in September, citing concerns that its Chinese owner, Wingtech Technologies, was shifting intellectual property to another firm it owned. The Dutch government subsequently removed Wingtech chairman Zhang Xuezheng as CEO and took control of Nexperia.
In response, China halted exports from all Nexperia's factories, prompting warnings that production lines at EU car factories would be forced to shut down within days. An extended blockade threatens the supply chain because many Nexperia products made in Europe were previously shipped to the Chinese factory for packaging and distribution.
Nexperia's interim CEO Stefan Tilger claimed that supplies had been suspended due to "recent failure to comply with agreed contractual payment terms," although he hinted at a possible resolution if payment was made. The company still hopes to resume shipments, but production cuts are looming for carmakers reliant on Nexperia components.
"We're seeing significant risks of disruption in the near future, and possibly even production stoppages" if the situation cannot be resolved quickly, said the German Association of the Automotive Industry (VDA). British operations may also be affected as Nexperia produces some chip wafers in Manchester. The US semiconductor company Vishay Intertechnology had previously acquired a UK factory set up by Philips.
With global auto manufacturers bracing for production disruptions, Toyota reported that it was not facing major supply problems despite potential future hits to production. Volkswagen, however, expressed concerns about meeting its annual profit targets without sufficient chips.
In a move that further escalates tensions between Europe and China, Nexperia, the EU-based chipmaker at the heart of a diplomatic row, has suspended supplies to its Chinese factory. This development has sent shockwaves through the global auto industry, with carmakers worldwide warning of production disruptions due to shortages of key components.
Nexperia's move comes after the Netherlands used national security laws to take control of the company in September, citing concerns that its Chinese owner, Wingtech Technologies, was shifting intellectual property to another firm it owned. The Dutch government subsequently removed Wingtech chairman Zhang Xuezheng as CEO and took control of Nexperia.
In response, China halted exports from all Nexperia's factories, prompting warnings that production lines at EU car factories would be forced to shut down within days. An extended blockade threatens the supply chain because many Nexperia products made in Europe were previously shipped to the Chinese factory for packaging and distribution.
Nexperia's interim CEO Stefan Tilger claimed that supplies had been suspended due to "recent failure to comply with agreed contractual payment terms," although he hinted at a possible resolution if payment was made. The company still hopes to resume shipments, but production cuts are looming for carmakers reliant on Nexperia components.
"We're seeing significant risks of disruption in the near future, and possibly even production stoppages" if the situation cannot be resolved quickly, said the German Association of the Automotive Industry (VDA). British operations may also be affected as Nexperia produces some chip wafers in Manchester. The US semiconductor company Vishay Intertechnology had previously acquired a UK factory set up by Philips.
With global auto manufacturers bracing for production disruptions, Toyota reported that it was not facing major supply problems despite potential future hits to production. Volkswagen, however, expressed concerns about meeting its annual profit targets without sufficient chips.
... china's just trying to even the playing field and now eu is all like "oh no we can't compete" 
nexperia's suspension of supplies is a big deal, but car manufacturers should've diversified their suppliers ages ago 
it's not like they're completely dependent on chinese factories for packaging and distribution... or are they? 
... I mean, I get why the Dutch government wanted to step in and protect their chipmakers, but Nexperia's move just feels like a massive escalation 
. I've got friends who work at car factories in Germany and they're already super stressed about this whole thing - what if it affects their jobs? 
And the fact that Volkswagen is worried about meeting its profit targets... that's not good for anyone, right? 
It just feels like we're playing with fire over here 
... hope they can figure out a solution soon! 
. With Nexperia's supplies being suspended, it's going to be a nightmare for carmakers trying to keep up with production demands 
.
. The fact that many of Nexperia's European-made components were being shipped to China for distribution is just adding fuel to the fire 
they got backup plans and everythin 
& btw who knew nexperia was so important 
like what if there wuznt a global auto industry? 
but i guess its all good now 
maybe china wll make a move again 
. The EU stepping in to take control of Nexperia was a smart move, I guess 
, but it's also put pressure on Europe's own chip production capabilities - what if they can't keep up? 
And then there's the global supply chain aspect... China halting exports from all Nexperia factories could cause some major disruptions 
. The VDA's warning about significant risks of disruption is definitely valid 
The global auto industry is really feeling the pinch now too - carmakers everywhere are worried about production delays & disruptions. It's gonna be an interesting few weeks to watch this whole situation unfold... 
And those car manufacturers aren't exactly breaking out the champagne either... Volkswagen is worried about meeting its profit targets? Yeah, that doesn't sound good at all 
vda is saying production stoppages r a real possiblity 
if they dont resolve it fast vishay intertechnology is like "lol no prob i got ur back" 
but toyota is all cool cuz they're not feeling the pain 
meanwhile volkswagen is stressing over their profit targets 
so what's going on with Nexperia and China? like they're basically cutting off each other 
i mean china just stopped exporting from all their factories in eu because of some dispute, now we got carmakers in eu freaking out about production 
. And now we're seeing the ripple effects on the global auto industry... it's gonna be a wild ride 
. And what's with the US getting involved via Vishay Intertechnology? Is that just good business practice or is there something more going on? 
Either way, it looks like carmakers worldwide are in for a wild ride 
The EU and China are already at each other's throats over this, and now it's affecting global production... yikes! 
. but at the same time, shouldn't there be some kind of trade-off or compromise here? like, maybe Nexperia can just make a small batch of chips in China and ship them out? 
It's like, Nexperia just got caught up in the whole EU-China thing and now carmakers are gonna have to deal with the fallout 
And what's going on with Toyota? Are they just, like, "meh" about all this and not feeling the impact? 
so maybe this whole thing will force us to rethink how we're producing and distributing chips worldwide 
. The thought of auto factories shutting down due to chip shortages just feels like too much for me. I mean, we already know that transportation and production are huge contributors to greenhouse gas emissions...do we really need more disruptions?