Nexperia China declares independence from Dutch HQ

An internal schism has emerged at battered chipmaker Nexperia as its Chinese division publicly stated that employees may disregard directives from the company’s Dutch headquarters. The announcement, posted on the Chinese unit’s Wechat page, asserts that Nexperia’s operations in China function as a domestic entity and are no longer bound by instructions from the Netherlands.

The move follows the Dutch government’s extraordinary seizure of control over Nexperia in September and suspension of Zhang Xuezheng as the firm’s CEO by the Dutch Enterprise Chamber. In response, Beijing had already blocked exports from Nexperia’s Chinese factories and criticized the Netherlands’ intervention.

Economic Affairs Minister Vincent Karremans is working to defuse the situation. In a Dutch TV show aired on Sunday, he said that lower-level bilateral discussions are already underway and will soon lead to a meeting with his Chinese counterpart.

The Chinese are deeply entrenched, however. “Minister Karremans’ expressed willingness to find a solution is a first step, but concrete actions must follow. Diplomatic statements cost nothing; changing policy requires courage,” the Global Times, a mouthpiece of the Chinese Communist Party, wrote on Sunday. Although not explicitly stated, the suggested “concrete actions” amount to Karremans distancing himself from the US.

Meanwhile, car manufacturers are getting nervous about chip supply. The European Automobile Manufacturers’ Association is “deeply concerned” about an impending disruption to European vehicle manufacturing and calls for an “immediate resolution.” Likewise, the Alliance for Automotive Innovation, which represents most firms selling cars in the US, calls for shipments of Nexperia’s automotive chips to quickly resume.

Nexperia’s front-end facilities are located in Europe, but assembly takes place in Asia, reportedly primarily in China.