Nexperia dispute heightens Europe–China supply chain tension

November 17, 2025 /SemiMedia/ — A growing dispute between the Netherlands and China over Nexperia is raising fresh concerns across the European automotive sector, where manufacturers warn that chip inventories could run out within weeks if cross-border wafer shipments fail to resume.

The tensions escalated after the Dutch government took control of Nexperia’s headquarters in September, citing governance issues and the risk of technology transfer to its Chinese parent company. China responded by imposing export controls on products assembled at Nexperia’s facilities in the country, disrupting the supply chain for key automotive components.

Nexperia produces billions of basic semiconductors used in vehicle lighting, airbags, locking systems and other core electronics. While wafers are fabricated in the UK, the Netherlands and Germany, final assembly is carried out in China before export. Industry officials say this flow has become increasingly strained as wafer deliveries from Europe to China stall.

Automakers warn of shrinking automotive chip inventories

Several executives noted that limited shipments have resumed after China eased some export restrictions. Still, a senior European automotive official said the situation remains “extremely challenging,” with Nexperia’s Dutch and Chinese operations locked in a standoff that has slowed normal production.

According to one automaker, wafer inventory at the Chinese assembly plant may last only until early to mid-December. “If we cannot secure wafers from Germany and the EU, our supply will dry up in a matter of weeks,” the executive said, adding that teams are scrambling to source substitutes but options remain limited for automotive-grade components.

Volkswagen said its operations have not been affected so far but described the environment as “volatile and uncertain,” warning that disruptions cannot be ruled out.

Governments push to restart cross-border wafer shipments

Dutch economic minister Vincent Karremans confirmed that a government delegation will travel to Beijing this week to continue negotiations. He welcomed China’s decision to ease export restrictions but said a full restoration of trade flows would require additional steps from both sides.

China’s Ministry of Commerce said it has held multiple rounds of talks with the Netherlands and urged the Dutch government to present a constructive proposal to help restore global semiconductor supply chain stability.

Global automotive semiconductor market faces renewed volatility

With inventories tightening and political pressure rising, analysts warn that the dispute could trigger another wave of volatility across the automotive semiconductor market, further exposing the fragility of cross-border chip manufacturing networks.