China warns Nexperia dispute may trigger chip supply crisis

China’s commerce ministry warned the “Dutch side” must bear full responsibility if a fresh dispute between Nexperia and its Chinese subsidiary reignites a global semiconductor supply chain crisis.

Nexperia is a Netherlands-headquartered chipmaker that supplies automotive semiconductors.

The ministry said Nexperia’s latest action “has seriously disrupted the company’s normal production and operations” and warned it could trigger a global semiconductor supply chain crisis.

The remarks followed a statement from Nexperia’s Chinese subsidiary accusing the Dutch headquarters of disabling office accounts for staff in China and disrupting operations.

Nexperia denied the allegation in an emailed statement to the South China Morning Post on Sunday and called the claim “factually incorrect and misleading.”

Nexperia China said most operations had resumed and that it had initiated a contingency plan to minimize potential impact on future production and delivery.

The row follows earlier disputes over operational decisions, governance, and authority, along with Dutch intervention and China’s retaliatory export restrictions that led to a production halt late last year and forced global carmakers to cut output; the situation has since improved following diplomatic efforts.

The Dutch Ministry of Economic Affairs and Climate Policy did not immediately respond to a request for comment on Sunday outside regular business hours.

🔗 Source: South China Morning Post

🧠 Food for thought

Implications, context, and why it matters.

Dutch emergency intervention and US export controls set the stage for current turmoil

In late September, the Netherlands used the Cold War-era Goods Availability Act to take supervisory control of Nexperia 1.
Dutch officials cited risks of technology transfer and “serious governance shortcomings” tied to actions by former chief executive Zhang Xuezheng 2.
The step followed a December 2024 US decision to add Nexperia’s parent company, Wingtech (a Chinese electronics manufacturer that owns Nexperia), to the “entity list” (a US trade blacklist that restricts exports to listed companies) over national security concerns 2.
Court filings state that US officials told the Dutch government Zhang needed replacing to avoid trade restrictions, based on Associated Press reporting 3.
In early October, Beijing blocked exports of Nexperia chips from China, and Honda shut down a factory in Mexico that produces its HR-V crossover 4.

Automakers’ dependence on low-cost, legacy chips leaves little room for disruption

The Nexperia dispute lays out how supply chains for commoditized “legacy” chips can snap, even as advanced semiconductors get more attention 5.
Many cars need hundreds of these basic parts for functions such as anti-lock brakes and airbag systems 4.
Parts makers often build these chips into pre-assembled modules from suppliers like Bosch (an automotive parts and technology supplier), which limits fast substitutions 6.
One missing Nexperia chip can stop an entire production line, pushing automakers and suppliers to revisit just-in-time practices, add inventory buffers, and pursue supply-chain diversification 6, 7.