【By Observer News, Qi Qian】

The Dutch government seized a Chinese semiconductor company, and then the chip "supply cut" crisis spread globally. After China granted an export exemption, the European automotive industry remained deeply concerned because they noticed that the subsidiaries of Nexperia in Europe refused to supply wafers to Nexperia (China).

According to Reuters on November 13, two sources said that European customers of Nexperia are working with the company to find a workaround to bypass the dispute between its European division and Chinese factory. It is revealed that they call this plan a "temporary patch," which means directly purchasing silicon wafers from the European factory, transporting them to China themselves, and signing contracts with the Chinese factory for final packaging.

The report stated that Nexperia Semiconductor and its parent company, Joying Technology, have not commented on the above report.

Nexperia produces low-profit basic chips, widely used in automotive electronic systems, controlling devices from lighting and airbag systems to door locks and windows. Nexperia produces wafers in the UK, Netherlands, and Germany, which are then sent to its Chinese subsidiary for packaging and then exported.

However, according to previous disclosures by European automotive industry officials, Nexperia (Netherlands) still has not supplied wafers to Nexperia (China).

The Nexperia branch in Hamburg, Germany. British media

The report said that this workaround is not a permanent solution, but provides a temporary patch, which may alleviate some pressure in the automotive market, as the chip shortage has affected the production of some cars and components. The method almost treats Nexperia (Europe) and Nexperia (China) as two independent production and packaging companies, and both are paid separately.

A source from a Nexperia product distributor said, "Many companies are currently negotiating, and some have already started purchasing wafers from Nexperia (Europe) and providing them to Nexperia (China) to obtain exclusive production."

It is currently unclear which customers are discussing this workaround, or whether any customers have started implementing it. It is known that enterprises using Nexperia chips include German Volkswagen, German Bosch, a subsidiary of German Continental Group Aumovio, and Japanese Honda.

Another source said that these major customers view this plan as a "short-term patch" while also considering other options.

Other potential workarounds use similar chips produced by other companies such as Onsemi and STMicroelectronics. At the same time, Nexperia (China) is seeking to replace European wafers with Chinese-made wafers.

According to the Financial Times on December 12, an EU official said that the supply to Nexperia's Chinese factory is expected to last until early to mid-December, although the current situation remains unstable, Nexperia (China) is trying to find alternative wafer sources. To avoid large-scale supply chain disruptions, the Chinese factory may also slow down its production speed.

Hong Kong's South China Morning Post reported at the beginning of the month that Nexperia (China) is expected to deliver products to domestic semiconductor supply chain customers. A report stated that several Chinese wafer manufacturers, including Wuxi Xinjie Energy Power Semiconductor Co., Ltd., Hangzhou Silan Microelectronics Co., Ltd., and Yangzhou Yangjie Electronic Technology Co., Ltd., are able to supply wafers to Nexperia China based in Dongguan.

Machine on the chip production line of Nexperia (Netherlands). Photo

Recently, China's leading semiconductor enterprise Joying Technology faced significant regulatory challenges abroad, and its core asset Nexperia Semiconductor, headquartered in the Netherlands, had its assets, intellectual property, etc., frozen for one year starting September 30 due to a directive from the Dutch government.

The Netherlands caused a big mess, seizing a Chinese-controlled enterprise, triggering supply interruptions, causing a "earthquake" in the global automotive supply chain, affecting automakers in the US, EU, and Japan.

On October 30, the Ministry of Commerce stated that the U.S. will suspend the implementation of its 50% penetration rule announced on September 29 for one year, and China will suspend the implementation of related export control measures announced on October 9 for one year, and will study detailed specific plans.

After the U.S. put the "50% penetration rule" on hold, the Netherlands found itself in a very awkward position, as it had previously followed the U.S. footsteps to seize Nexperia Semiconductor.

However, the Netherlands still "refuses to admit defeat." Vincent Karremans, Minister of Economic Affairs of the Netherlands, is the "key figure" in this controversy storm. In an interview published on the 13th, he claimed that the dispute between the EU and China over the supply of key automotive chips from Nexperia Semiconductor has made global leaders realize their dependence on China.

"Nexperia (Netherlands) announced on October 26 that it would stop supplying wafers to Nexperia (China), causing the latter to be unable to produce normally, creating turbulence and chaos in the global semiconductor supply chain," said a spokesperson for the Chinese Ministry of Commerce on November 4. For this, the Dutch side should bear full responsibility.

According to reports, Karremans issued a statement on the 13th regarding the issue of Nexperia Semiconductor, stating that the assurance of predictable supply of key chips and mutual interdependence are crucial for the global industry and supply chain. The Netherlands will continue to work towards diplomatic dialogue with China. A high-level delegation of officials from the Dutch Ministry of Economic Affairs will visit Beijing next week to "continue seeking solutions acceptable to both sides" regarding the issue of Nexperia Semiconductor.

In response, the spokesperson for the Ministry of Commerce, He Yadao, stated that since the incident involving Nexperia Semiconductor, China has always taken a responsible attitude toward the stability and security of the global semiconductor supply chain and has conducted multiple rounds of consultations with the Dutch side. We have agreed to the request of the Dutch Ministry of Economy to send personnel for consultation. We hope the Dutch side will show the willingness to cooperate sincerely with China, quickly propose substantive and constructive solutions to the problem, and take concrete actions to rapidly and effectively restore the safety and stability of the global semiconductor supply chain from the source.

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Original: https://www.toutiao.com/article/7572423334878413327/

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