Nexperia China unit asserts its independence as tensions with the Netherlands run high

By Che Pan and Brenda Goh

BEIJING (Reuters) -Nexperia’s China unit has respected Chinese laws and has the right to operate independently, it said on Saturday, a day after the Netherlands said talks had begun to try to ease tensions over export controls.

As Nexperia became entangled in trade frictions between the United States and China, the Dutch government on September 30 took control of the company that makes chips for carmakers and for consumer electronics. It cited worries about the possible transfer of technology to Nexperia’s Chinese parent company, Wingtech.

Days later, on October 4, China’s commerce ministry blocked Nexperia from exporting chips from China.

On Saturday, Nexperia’s China unit said on its official WeChat account that all of its employees continued to work under the instructions of the China unit. Its employees have the right to reject any “external instructions” not consented to by its Chinese legal representative, it added.

Salaries and bonuses would continue to be paid out by Nexperia China, and not by Nexperia Netherlands, it also said.

Wingtech and Nexperia did not immediately respond to requests for comments.

The tensions have led to worries in the global automotive and electronic industries of possible chip shortages that could disrupt production.

Nexperia’s chips, which are not technically sophisticated, are needed in large volumes.

The biggest manufacturing site is in Hamburg, Germany, but according to two sources briefed on the matter, more than 70% of Nexperia’s chips are shipped back to China to be packaged in Dongguan, a manufacturing hub in China’s southern Guangdong province.

Volkswagen and BMW both said they were working to identify potential supply risks, but that production in Europe had not been impacted yet.

($1 = 7.1264 Chinese yuan renminbi)

(Reporting by Che Pan and Brenda Goh; editing by Barbara Lewis)