Nexperia Crisis Deepens: Dutch Chipmaker Pleads with China Unit as Global Automotive Supply Chains Face Imminent Outages

Nexperia Issues Urgent Plea to China Unit Amid Global Supply Chain Crisis

The intricate global supply chains underpinning the automotive industry are once again under severe strain as Dutch chipmaker Nexperia has issued an urgent public appeal to its China-based operations. In a dramatic open letter, Nexperia's Dutch unit called for an immediate restoration of crucial supply flows, warning that customers across various sectors are reporting "imminent production outages." This unusual public plea follows what Nexperia described as "repeated attempts to establish direct communication through conventional channels" that yielded no "meaningful response." The escalating dispute represents the latest chapter in a complex saga that has rattled international trade relations and exposed vulnerabilities in the technology sector.

Nexperia, renowned for manufacturing billions of essential "foundation chips" such as transistors, diodes, and power management components, operates a critical global pipeline. These components are produced in Europe, then assembled and tested in China, before being re-exported worldwide. Despite their relatively low-tech and inexpensive nature, these chips are indispensable, found in nearly every electronic device and playing vital roles in cars for functions like braking systems, airbags, lighting, sensors, and entertainment systems.

A Timeline of Geopolitical Tensions

The current crisis has its roots in a series of events sparked in September. The Dutch government, citing national security concerns reportedly raised by the U.S., took the extraordinary step of invoking a Cold War-era law to effectively nationalize Nexperia. This move triggered a swift response from Beijing, which reportedly began blocking the export of Nexperia's products from China, sending shockwaves through global automakers already grappling with chip shortages. Last week, a potential breakthrough emerged when the Dutch government announced a suspension of its intervention at Nexperia after discussions with Chinese authorities, leading to hopes that the dispute might be nearing an end and normal supply chains could resume.

Uncertainty Lingers for Global Automakers

However, the recent public letter from Nexperia indicates that the path to resolution remains fraught with uncertainty. Rico Luman, a senior sector economist at ING, commented on the ongoing complexity, stating that while the state measures have been lifted, discussions are still underway to redefine the corporate structure and relationship with Nexperia's Chinese parent company, Wingtech. Luman also highlighted that the issue extends beyond finished chips to include "wafer supplies from Europe to the Chinese entity." Major automotive players, including Japan's Nissan and Germany's Bosch, have already raised alarms about potential component shortages.

The German Association of the Automotive Industry (VDA), representing giants like Volkswagen, Mercedes-Benz Group, and BMW, has voiced concerns over elevated supply risks, particularly anticipating challenges in the first quarter of 2026. A VDA spokesperson acknowledged the German industry's efforts to maintain stable production recently but stressed that "the disruptions in the supply chain for Nexperia parts caused by political intervention have not been fundamentally resolved. Component availability remains uncertain." Luman drew parallels between the Nexperia situation and China's past rare earth export controls, underscoring China's strong position due to European manufacturers' dependence on these crucial supplies and the lack of transparency regarding chip allocations.