On October 19, 2025, Dutch semiconductor manufacturer Nexperia said its employees in China still have access to company systems and continue to receive salaries as usual, dismissing claims that its Dutch parent company and the Netherlands government had abandoned the Chinese market.

"We are aware of a message circulated by individuals at Nexperia China falsely claiming that Nexperia and the Dutch government have withdrawn from China and that the factory is now operating under a new entity," the company told Reuters. "Any statements about salaries not being paid are factually incorrect and misleading."

The clarification came after Nexperia's China unit issued a public letter asserting its right to operate independently under Chinese law and instructing employees to reject any "external orders" not approved by its local legal representative. The unit also stated that salaries and bonuses would continue to be paid by Nexperia China, not its Dutch headquarters.

The dispute follows the Dutch government's takeover of Nexperia on September 30, when it cited national security concerns and the potential transfer of sensitive technology to Nexperia's Chinese parent company, Wingtech Technology (600745.SS). The Dutch authorities simultaneously removed Nexperia's Chinese CEO, Zhang Xuezheng (Wing Zhang), accusing him of "unauthorized actions" and confirming he had been suspended by court order.

Shortly after, on October 4, China's Ministry of Commerce imposed export controls on Nexperia China, prohibiting the export of specific semiconductor components and subassemblies manufactured in China. The move effectively halted shipments from Nexperia's major packaging and testing operations in Dongguan, Guangdong, where more than 70% of Nexperia's global chip output is processed.

Nexperia — a leading global IDM for discrete and power semiconductors with more than 16,000 product lines including MOSFETs, diodes, logic ICs, and ESD protection devices — plays a critical role in the automotive chip supply chain. The company's small-signal diodes and transistors rank first worldwide, and its automotive-grade power MOSFETs rank second globally.

However, the escalating dispute has now sparked alarm across the global automotive industry. The European Automobile Manufacturers' Association (ACEA) warned on October 16 that if chip shipments from Nexperia do not resume soon, European car production could face serious disruption. Automakers and suppliers reportedly received notice from Nexperia on October 10 that it could no longer guarantee chip deliveries due to the ongoing conflict between China and the Netherlands.

ACEA Secretary General Sigrid de Vries said the situation "poses cross-industry risks affecting numerous suppliers and nearly all members," urging all parties to reach a pragmatic solution quickly. Automakers including Volkswagen and BMW said production in Europe has not yet been impacted but that they are assessing potential supply risks.

In the United States, the Alliance for Automotive Innovation (AAI) — representing General Motors, Ford, Toyota, Volkswagen, Hyundai, and nearly all major automakers — issued a similar warning. "If the shipment of automotive chips doesn't resume quickly, it's going to disrupt auto production in the U.S. and many other countries, with spillover effects across industries," said AAI CEO John Bozzella, adding that U.S. auto plants could feel the impact as early as next month.

According to Wingtech Technology, Nexperia's Chinese operations account for around 80% of the company's total production capacity (mainly back-end packaging and testing) and 50% of its global sales. If export restrictions persist, analysts warn the supply chain consequences could extend well beyond the automotive sector.

While Nexperia insists it remains committed to its Chinese employees and customers, Wingtech confirmed that Chinese staff accounts were temporarily suspended after the Dutch takeover, prompting the local team to take "independent emergency measures" to ensure domestic supply continuity.

With both governments refusing to yield and the semiconductor industry caught in the middle, observers say the Nexperia case may become a critical test of cross-border chip supply resilience — exposing the geopolitical fault lines now shaping the global semiconductor landscape.