Nexperia's Chinese Subsidiary Orders Staff to Ignore Dutch Headquarters' Instructions
Concerns Over General-Purpose Semiconductor Shortages if Conflict Prolongs
The South China Morning Post (SCMP) reported on October 19 (local time) that the Chinese subsidiary of Nexperia, a vehicle semiconductor manufacturer, has instructed its staff to ignore orders from its Dutch headquarters.
According to SCMP, Nexperia China announced the previous day that "local managers will be responsible for the operation of Chinese factories and other facilities, and they have the right to refuse instructions from the Dutch headquarters." The company also stated that salaries for local Chinese employees would be paid by the local entity.
Headquartered in Nijmegen, the Netherlands, Nexperia manufactures general-purpose semiconductors essential for key components of major automakers at its factories in Shanghai, Beijing, Shenzhen, Dongguan, and Wuxi. Its main products include bipolar transistors, diodes, electrostatic discharge (ESD) protection devices, transient voltage suppression (TVS) diodes, metal-oxide-semiconductor field-effect transistors (MOSFETs), and logic devices.
At the end of last year, as part of its controls on China, the United States added Nexperia to its sanctions list following Wingtech. Last month, the Dutch authorities stripped Zhang Xuezheng, chairman of Wingtech, of his control over Nexperia, citing the Goods Availability Act. This law allows the Dutch government to nullify decisions made by the boards of private companies if they are deemed a threat to national security.
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In response, the Chinese Ministry of Commerce banned the export of products from Nexperia's manufacturing plants and subcontractors within China, prompting Nexperia China to play the card of refusing instructions from its Dutch headquarters. It is known that 80% of Nexperia's products are manufactured in China. There are growing concerns that if the Chinese authorities' export ban continues for an extended period, the automotive industry may face a shortage of semiconductors for diodes and transistors produced by Nexperia.
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