The Tamesis
The domestic unit of Netherlands-based Chinese chipmaker Nexperia will soon be able to produce semiconductors locally in China, two company sources told AFP.
Nexperia is at the center of a global tug-of-war over key semiconductor technology, with a Dutch court in February ordering an investigation into alleged mismanagement of the company.
Geopolitical wrangling has disrupted supply chains, with some automakers reportedly forced to cut production due to chip shortages.
Also Watch AF: Has organized crime consolidated its grip on Cambodia?
Local production will allow the company’s domestic unit, Nexperia China, to bypass restrictions on the supply of silicon wafers to China from the company’s European factories since October. Silicon wafers are etched with tiny components to create the chips.
“From a supply chain perspective, we have completed the transition from global production to domestic production in China,” Nexperia China representatives told potential customers at a company event in Beijing on Wednesday.
The representative assured attendees that domestically produced chips will meet the same strict quality standards as previous products.
“Because the Netherlands has cut our wafer supply, we have to use domestic wafers. All products in the future will be completely produced locally.” A person familiar with the matter told AFP.
He said Nexperia’s Chinese subsidiary could achieve full localization of most of its chips, including those widely used in automobile production, by the second half of 2026.
The Dutch company referred AFP to previous public statements, including an open letter published in November, saying it “continues to seek constructive cooperation with Nexperia’s entities in China and has been asking for an open dialogue to find a way to resume normal supply of goods.”
“Any subsequent attempts by (Nexperia’s Dutch headquarters) to engage in a constructive and meaningful dialogue with Chinese management have been unsuccessful.”
The debate surrounding “technology leaked to China”
The Nexperia saga began in September 2025, when the Dutch government invoked Cold War-era laws to effectively seize control of Nexperia, which is headquartered in the Dutch city of Nijmegen.
It was once part of Dutch electronics giant Philips and was acquired by China’s Wingtech Technology in 2018.
The Dutch government said at the time that it was taking over the unit for the following reasons: Concerns about potential transfer of key technologies to China.
Nexperia’s Chinese subsidiary said in a statement last month that the company’s Dutch headquarters had cut off Chinese employees’ access to its office systems, causing “serious disruption” to operations.
Nexperia microchips are primarily used in automobiles, but are also used in industrial components and consumer appliances and electronics such as refrigerators.
Before the seizure, Nexperia typically produced wafers in Europe and sent them to China and Southeast Asia for packaging into finished chips.
Beijing retaliated for the October seizures by imposing export controls on products manufactured by Nexperia in China. The move dealt a blow to the company’s business, but Beijing later re-allowed exports for civilian use.
The resumption of shipments was part of a trade deal reached after talks between Chinese President Xi Jinping and U.S. President Donald Trump in South Korea last October, The Wall Street Journal reported at the time.
90% capacity target
In late October, Nexperia said it had suspended direct supply of wafers to its Chinese subsidiary. The suspension remains in effect.
Just a few weeks ago, Nexperia China announced that it would start producing multiple types of chips using domestic 12-inch wafers.
Similar chips produced by its Dutch parent company use less advanced 8-inch wafers from Germany.
Nexperia’s Chinese packaging plant in the Dongguan manufacturing hub is currently operating at about 60-70% of original capacity, using inventory, customer-supplied wafers and alternative domestic suppliers, people familiar with the matter told AFP.
He said the company is expected to restore 90% of its production capacity for popular products in the second quarter of this year.
Currently, the main production of the Chinese factory is concentrated in a packaging factory in Dongguan and a wafer fab in Shanghai, supplemented by contracted external suppliers to provide additional packaging and wafer production capacity.
“Nexperia China’s future focus will be on these two factories (Dongguan and Shanghai),” the source said.
“They will be the main production centers for our products.”
- Vishakha Saxena Additional Editor AFP
Also read:
China beats U.S. again in global patent battle, Huawei maintains lead
Nexperia’s spat with Chinese parent intensifies as chip supply struggles
Dutch government suspends Nexperia acquisition after talks with China
Dutch take control of Chinese chipmaker over fears of technology leaks
Chinese spies target Dutch tech: intelligence agency
Dutch minister says China poses ‘biggest threat’ to chip technology secrets
Chinese company Nexperia to acquire Dutch chip startup
ASML employees who stole chip secrets “went to work for Huawei”
China threatens to cut off ASML supplies over new U.S. chip restrictions
Staff at UK’s biggest chip factory want to keep Chinese owner – BBC
