Nexperia’s Chinese subsidiary assured customers on Sunday that operations will continue smoothly despite its Dutch parent company cutting off wafer supplies. The announcement comes as recent diplomatic progress between Washington and Beijing offers potential resolution to a semiconductor crisis affecting manufacturers worldwide.

The Chinese operations confirmed they’ve stockpiled enough finished products and work-in-progress inventory to maintain steady supply chains through year-end and beyond. Multiple contingency plans are already in motion, with the company fast-tracking certification of alternative wafer suppliers. Management expressed confidence about reaching full production capacity next year.

Corporate Dispute Intensifies

Tensions escalated when Nexperia’s Netherlands headquarters stopped wafer shipments to the Dongguan assembly facility on October 26. The Dutch side cited the local subsidiary’s failure to meet agreed payment terms as justification. This matters significantly because the Dongguan plant handles roughly 70% of Nexperia’s worldwide production.

Nexperia China fired back sharply, calling the Dutch explanation misleading and deceptive. According to the Chinese subsidiary, Nexperia Netherlands actually owes over 1 billion yuan (approximately $140 million) in outstanding payments to the Dongguan operation. Chinese management accused Dutch leadership of prioritizing personal interests over company welfare and demanded they accept legal responsibility for damages to the business and its employees.

Trade Agreement Opens Path Forward

This standoff emerged after the Dutch government seized control of Nexperia from Chinese owner Wingtech Technology in September, pointing to national security concerns. China responded by restricting exports of Nexperia products manufactured at its facilities.

Recent developments offer hope for resolution. A trade agreement reached between President Trump and Chinese leader Xi Jinping in South Korea established a framework for progress. Under the Saturday announcement, China will implement appropriate measures to restore trade from Nexperia’s Chinese facilities, while the United States will pause its “50% subsidiary” export control rule for one year.

China’s Commerce Ministry stated it will grant exemptions to companies meeting specific criteria, though exact requirements haven’t been disclosed. The Dutch government welcomed these announcements but declined to comment on Nexperia China’s independence plans.

The dispute threatened global automotive manufacturing, with companies like Volkswagen and Volvo warning about potential production shutdowns. European automakers depend heavily on Nexperia’s basic power management chips, which are essential components in vehicle electronics systems.