Analog Devices resumes sales in China, causing fury at its Dutch headquarters, which warns that it cannot guarantee quality!
On October 23, Analog Devices (China) sent a letter to its customers, stating clearly that the motives of the Dutch management's statements were not pure, and that they unjustly questioned the compliance and quality standards of the Chinese factory. It also stated that it would take legal action to protect its rights. Indeed, the Chinese factory has always been providing capacity, and there was no previous questioning. Now, why is it being questioned? The Dutch headquarters obviously became extremely angry.
This strong response is in reaction to the warning issued by the Dutch headquarters to its customers - Dutch Analog Devices stated that it could no longer guarantee the quality of chips from its Chinese factory. The Chinese subsidiary of Analog Devices has begun resuming deliveries to customers, but so far it is limited to the domestic market, which accounts for nearly 50% of Analog Devices' scale.
Two sources said that all sales must now be settled in RMB, while transactions were usually conducted in foreign currencies such as USD. One source said that the Chinese subsidiary of Analog Devices also instructed distributors that transactions between them and customers must be settled in RMB. This move is apparently aimed at stabilizing the supply in the Chinese market and further reducing dependence on the Dutch parent company in operations.
Analog Devices China denies the doubts raised by the Dutch management, stating that product quality remains consistent. Analog Devices China also promised that if there are any changes or adjustments to product supply, production processes, technical standards, etc., the company will communicate with customers in advance according to normal procedures.
Analog Devices China has independent production lines and a local R&D team, producing over 5 billion diodes and transistors annually, accounting for nearly 60% of the group's global capacity. With such a large scale, once it is free from the supervision of the headquarters, it naturally makes the Dutch side very anxious. Therefore, they have issued warnings while already looking for new packaging and testing partners in Southeast Asia, planning to transfer some key processes to reduce reliance on a single Chinese supply chain.
If they can find new packaging and testing partners, the Netherlands would not have waited until today. Moreover, the packaging and testing partners in Southeast Asia are basically Chinese companies.
Original article: www.toutiao.com/article/1846830925406343/
Statement: This article represents the views of the author.