Nexperia's Supply Suspension: A Chip Crisis Looms

Dutch chipmaker Nexperia has suspended wafer supplies to its Chinese assembly plant due to contractual issues, according to a letter addressed to its customers seen by Reuters. The suspension might worsen the supply squeeze affecting automakers globally.

The letter, dated October 29, signed by interim CEO Stefan Tilger, mentions that the suspension began on October 26 because of the local management's failure to meet contractual payment terms. This development follows the Dutch government's control over Nexperia since September 30, after removing its Chinese CEO over technology appropriation concerns.

While Nexperia remains committed to the Chinese market, it explores alternatives to continue supplying its customers. A rise in chip prices has been noted, reflecting industry anxiety over this dispute's impact. Dutch and European governments are in talks with Chinese authorities seeking a resolution.