Europe’s legal and political dispute with China regarding chipmaker Nexperia has led to disruptions in global supply chain stability, as per a report by Investment Monitor. The conflict involving Nexperia’s Dutch company and a manufacturing site in China’s Guangdong has resulted in production halts at several car manufacturing plants.
The Guangdong facility, responsible for producing around 50 billion units annually, accounted for approximately half of Nexperia’s total output prior to the dispute. Nexperia, a semiconductor manufacturer, operates as a Dutch subsidiary of Wingtech Technology, a Shanghai-based electronics firm with partial ownership by the Chinese government.
Following allegations of improper technology transfers and resource diversion, a Dutch court placed Nexperia under trustee supervision in October, stripping ownership rights from parent company Wingtech Technology and suspending founder Zhang Xuezheng as CEO, as reported by Investment Monitor citing Bloomberg.
Despite Wingtech’s denial of any wrongdoing and subsequent negotiations with trustees, political tensions have persisted. This has led to some banks retracting financial support, including an $800 million credit line. Both Nexperia and Wingtech have taken steps to operate independently in the future, with the Dutch side investing around $300 million to expand production capacities outside China, aiming for 90% non-Chinese output by mid-2026, focusing on facilities in Malaysia and the Philippines.
Major automakers such as Honda and Volkswagen have faced disruptions, with Honda temporarily ceasing production at multiple plants and Volkswagen exploring alternative sourcing options. ZF Friedrichshafen also reduced output due to critical component shortages. To maintain supply, Robert Bosch resorted to transporting wafers from Europe to China, incurring high costs and proving unsustainable.
