Exclusive-Nexperia's China unit switches to local firms for wafer supplies- document

Dec 19 (Reuters) - The ‌Chinese unit of Netherlands-based Nexperia has locked in supplies of silicon wafers from local firms to cover its entire 2026 ‍production of ‌a key product, a document showed, after the Dutch firm stopped supplying the raw material in a corporate dispute.

The development will allow ⁠the Chinese unit, which declared itself independent of Nexperia's European management ‌two months ago, to continue manufacturing Insulated-Gate Bipolar Transistor (IGBT) power chips and modules, switches that regulate current in electric vehicles and industrial equipment.

The dispute began when the Dutch government took control of Nexperia from its Chinese parent Wingtech in September, citing governance issues. In late October, it suspended supplies of wafers to ⁠the Chinese unit, while a Dutch court ordered Wingtech's founder be removed as Nexperia CEO.

Beijing responded by halting exports of Nexperia's finished products, triggering chip shortages for global automakers.

Both ​governments relaxed their measures last month, but court fights and an internal battle continue ‌over control of Nexperia, with China and Wingtech both warning ⁠that disruptions could resume without a long-term resolution.

In a letter sent to its distributors earlier this month and seen by Reuters, Nexperia's China unit said it had locked in wafer production capacity for IGBT products with local suppliers for 2026 and was accelerating ​verification of wafers from Wingtech's foundry Wingsky Semi to ensure "abundant supply."

The previously unreported move marks a further supply-chain separation between Nexperia China and its Dutch parent that could lead to a complete split.

Nexperia told Reuters that it was not in communication with its Chinese subsidiary and the unit showed "no intention to negotiate a short-term solution to restore the flow of chips to customers."

Nexperia China did not immediately reply ​to a ‍request for comment.

Beijing last week called on ​the Dutch government to implement the consensus they reached on encouraging negotiations between Nexperia and Wingtech and to urge the chipmaker to send representatives to China as soon as possible for talks.

WAFER INVENTORY RUNNING LOW

Nexperia China has told local distributors wafer inventory at its factory in Dongguan in southern China's Guangdong province is low as supply from the Netherlands is not expected to resume soon, a person familiar with the matter said.

Its low wafer inventory has started causing a Nexperia chip shortage for Chinese automakers, especially for logic devices, transistors and diodes, Nexperia's most ⁠popular products, according to the source. 

Japan's Honda Motor also said earlier this week that some of its factories in China and Japan would have to temporarily suspend operations due to a shortage of ​chips.

Wingsky Semi will supply 12-inch automotive-grade IGBT wafers and its Shanghai production base currently has the capacity to produce 30,000 wafers per month, the letter said.

Apart from Wingsky Semi, Nexperia China will also receive supplies of 8-inch IGBT wafers from Shanghai GAT Semiconductor and United Nova Technology Co, a fab linked to Semiconductor Manufacturing International Corp (SMIC), according to the letter.    

The letter ‌did not specify the volume of wafer supply the company had secured.

Wingsky Semi and United Nova did not immediately reply to requests for comment. GAT Semiconductor could not be reached for comment.

(Reporting by China newsroom and Amsterdam newsroom; Editing by Miyoung Kim, Kate Mayberry and Eduardo Baptista)