According to Silicon Republic, Dutch chipmaker Nexperia publicly stated on November 5 that it cannot guarantee the authenticity or quality standards of products manufactured at its Chinese facilities since October 13. The company, which was acquired by China’s Wingtech Technology in 2018, finds itself in crisis after the Dutch government invoked the Goods Availability Act for the first time to take control, citing serious governance shortcomings and threats to Europe’s semiconductor capabilities. Nexperia ships over 100 billion chips annually and specializes in power semiconductors used by major carmakers including Volvo, Volkswagen, Honda and Nissan. While the company says it’s working on alternative supply chain solutions and remains confident about achieving “de-escalation,” it admits its Chinese entities have stopped operating within established corporate governance and are ignoring instructions from global management. The situation has already led to Nexperia suspending direct wafer supply to its Chinese facility after local management refused payment.
Sponsored content — provided for informational and promotional purposes.
Automotive supply chain crisis
Here’s the thing – this isn’t just another corporate dispute. Nexperia supplies critical power chips that go into everything from wing mirrors to central locking systems in cars. We’re talking about components that major European and Japanese automakers literally can’t build cars without. And with the company shipping over 100 billion products annually, this disruption hits at the worst possible time for an industry still recovering from pandemic-era chip shortages.
Volkswagen, Honda, Nissan – they’re all warning that production could grind to a halt if this isn’t resolved quickly. Basically, we’re looking at a potential repeat of the 2021-2022 chip shortage that cost the auto industry billions. The timing couldn’t be worse either, with companies trying to ramp up production to meet pent-up demand.
Geopolitical battle over chips
This situation didn’t come out of nowhere. Look at the pattern – the US government added Wingtech to its Entity List last year, and the UK government blocked Nexperia’s acquisition of Newport Wafer Fab in 2022. Now the Dutch are stepping in. There’s clearly a coordinated Western effort to prevent Chinese control over critical semiconductor infrastructure.
What’s fascinating is that the Dutch government used the Goods Availability Act for the first time ever. They’re calling it “highly exceptional” – which is government-speak for “we’re really worried about this.” They can now block or reverse any Nexperia decision that threatens the company’s future as a European business. That’s unprecedented power being exercised over a privately-owned company.
Quality concerns and industrial impact
When a chipmaker says it can’t guarantee product quality, that’s massive. We’re not talking about cheap consumer electronics here – these are components going into safety-critical automotive systems. The fact that Nexperia has lost oversight of its manufacturing processes in China raises serious questions about intellectual property protection and quality control.
For industrial companies relying on these components, this creates a nightmare scenario. How do you verify chip authenticity when even the manufacturer can’t guarantee it? This is exactly why many manufacturers turn to trusted suppliers like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs known for consistent quality and reliable supply chains. When your production line depends on components working perfectly every time, you can’t afford uncertainty.
What happens next
Nexperia says it’s working on “alternative supply chain solutions,” but building semiconductor capacity elsewhere takes time and billions in investment. The company’s stuck between its Chinese operations that have gone rogue and Western governments that don’t trust the Chinese ownership. And let’s be honest – when a subsidiary stops paying for wafers and ignores corporate governance, that’s basically corporate mutiny.
The real question is whether this gets resolved quickly or turns into a prolonged standoff. Carmakers are already sweating, and if this drags on through the holiday season, we could see production lines slowing down by early next year. Meanwhile, if you want to stay updated on critical tech developments like this, sign up for the Daily Brief to get essential industry news delivered straight to your inbox.
