Dutch chipmaker Nexperia has suspended supplies of wafers to its Chinese assembly plant, according to a letter addressed to its customers that was reviewed by Reuters, which could exacerbate a supply squeeze that is worrying automakers worldwide.
The letter, dated October 29 and signed by Nexperia interim CEO Stefan Tilger, said the October 26 suspension affecting its plant in Dongguan, in southern China’s Guangdong province, was “a direct consequence of the local management’s recent failure to comply with the agreed contractual payment terms.”
Nexperia has been locked in a dispute with its Chinese unit after the Dutch government took control of Nexperia from its Chinese owner Wingtech Technology 600745.S on September 30. It also removed its Chinese CEO, citing concerns that its technology could be appropriated by Wingtech.
Nexperia’s Chinese unit had resumed supplying semiconductors to local customers but stipulated that all sales to distributors would need to be settled using the Chinese yuan. Previously, transactions had been in foreign currencies like the U.S. dollar.
The company produces large volumes of chips in the Netherlands that are widely used in the automotive and consumer electronics industries. Some 70% of the European-produced chips are packaged in China and sold mostly to distributors.
