Dutch takeover of Chinese-owned Nexperia raises chip supply concerns

The Dutch move set off alarms across the automotive industry because Nexperia supplies silicon discrete and standard logic components used in nearly every electronic control unit (ECU) in modern vehicles. Though not as high profile as microcontrollers or advanced systems-on-chip, these parts are essential for everything from lighting and body electronics to airbag systems and powertrain controllers.

Concerns grew after China issued new export regulations. On Oct. 4, 2025, the Chinese Ministry of Commerce prohibited Nexperia China and its subcontractors from exporting certain finished components and assemblies without explicit licenses. Nexperia confirmed it is actively working with mainland Chinese authorities to obtain exemptions and limit disruptions.  

Although Nexperia’s roots and research and development leadership remain in Europe, its manufacturing has gradually shifted to China. It still operates front-end fabrication plants in Hamburg, Germany, and Manchester, UK. However, a 300-mm wafer fabrication plant in Shanghai, which ramped up in 2024, has become central to its growth strategy for discrete devices.

Even more critical is Nexperia’s assembly and test facility in Dongguan, China—its largest back-end site. According to Wingtech Chair Yang Mu, as of mid-2025, about 80% of Nexperia’s total end-product capacity was in mainland China, with 70% from Dongguan. Mainland China also accounts for 48% of the company’s total revenue, reflecting its production and customer base concentration. This geographic concentration exposes the automotive supply chain to potential export restrictions, particularly for low- and mid-complexity components like diodes, small-signal transistors and logic integrated circuits (ICs).

Although these components can be replaced, doing so requires ECU requalification and safety testing, adding operational risk and delaying production. Nexperia products may be less technically complex, but they are deeply integrated across vehicle systems, which would cause logistical bottlenecks if the Nexperia chip supply were to be disrupted.

This heavy reliance on China echoes broader trends in the nation’s semiconductor industry, as explored in this analysis of China’s automotive chip supply chain and policies.

The automotive industry’s exposure to Nexperia is real but nuanced. S&P Global Mobility estimates that Nexperia accounts for about 5% of the global automotive silicon discrete market, with a slightly higher share in Europe. Nexperia mostly sells standard parts rather than application-specific ICs or microcontrollers, so alternatives are readily available from Infineon, ON Semiconductor, ROHM, Renesas or STMicroelectronics.

This contrasts with the 2020–2021 COVID-19 supply crisis, which was systemic and affected microcontrollers, analog ICs and foundry capacity across multiple suppliers. The current disruption is limited to one supplier, and the affected products are commodity-type, standards-based components rather than application-specific chips. Standard silicon discretes are interchangeable across JEDEC- and AEC-Q101-qualified suppliers, allowing tier 1 suppliers and OEMs to substitute equivalent devices without major redesigns.

Even so, because Nexperia’s parts are widely used across vehicle systems—often hundreds per car—no OEM is completely insulated. Replacing individual devices may be simple, but requalifying parts, coordinating procurement and verifying functional safety at scale create short-term operational challenges.

Tier 1 electronics suppliers such as Bosch, Continental and DENSO play a critical role in mitigating exposure. Many use dual-sourcing strategies for high-volume components and are actively assessing inventories and alternate suppliers. Stockpiles in distribution channels provide a buffer against immediate disruption. While these inventories were not intended as strategic reserves, they offer OEMs time to find alternative suppliers, qualify replacement components and adjust production schedules. 

German OEMs are especially sensitive to Nexperia-related disruptions because they rely heavily on domestic tier 1 suppliers and local production facilities. These OEMs are particularly concerned ahead of several major launches scheduled for late 2025 and early 2026, including BMW's Neue Klasse platform, Mercedes-Benz's next-generation CLA and Volkswagen's all-electric T-Cross. A shortage of Nexperia semiconductors could significantly disrupt these rollout timelines.