a China-based division and the remainder of the corporation.. While production has resumed at its Dongguan, China facility, the financial flow and operational control have undergone a significant shift, raising concerns about the company’s long-term stability and highlighting the intensifying geopolitical tensions impacting global supply chains.
According to the Frankfurter Allgemeine Zeitung, a key change involves payment processing. Customers of the Chinese facility are now directed to remit funds to accounts “outside our group” bypassing the parent company’s consolidated accounts based in Nijmegen, Netherlands. Payments are also being processed in Chinese currency, rather than the traditional US dollar. A company spokesperson confirmed these changes, acknowledging that while the resumption of production is welcome, the altered payment structure is a source of considerable anxiety.
The situation underscores a deepening rift between the European and Chinese divisions of Nexperia. The company, generating approximately €2 billion in revenue in 2024, formerly part of the Philips conglomerate, has undergone several ownership changes since 2019, culminating in control by Chinese investor Zhang Xuezheng through his Wingtech investment firm. This ownership structure has seemingly entangled Nexperia in the escalating political maneuvering between the Netherlands, China and the United States, compounded by what the company suspects are internal power struggles.
While the spokesperson maintains that the altered financial arrangement does not currently pose an existential threat to the corporation, the implications for Nexperia’s governance and financial integrity are substantial. The company is a crucial supplier to numerous industries, particularly the automotive sector and this disruption raises questions about the reliability of its supply chain and its ability to meet contractual obligations.
Nexperia produces a substantial volume of semiconductors – 110 billion annually – with facilities in Hamburg, Manchester and various Asian locations, including Dongguan. While the facilities outside China produce 45 billion chips, Dongguan is responsible for 50 billion specifically for export. This export-focused production, coupled with the lower price points associated with the Chinese-made chips, contributes to a disproportionately small share of revenue for that segment, further complicating the company’s financial picture. The company’s reliance on standard chip production, generating half of its revenue from the automotive industry and contributing to other sectors ranging from GPS trackers to medical sensors, exposes it to broad economic sensitivity and potential supply chain vulnerabilities.
The unfolding situation at Nexperia serves as a stark example of how geopolitical tensions and complex ownership structures are increasingly impacting even the most essential components of the global technology landscape, creating significant risks for both the company and its customers.