Strange contradictions in the chip industry

Nexperia's logo photographed in Hamburg, Germany. Photo: Reuters .

Nexperia China, a subsidiary of Dutch chipmaker Nexperia, sent an internal memo to employees demanding they follow the direction of local management and ignore any instructions from its headquarters in the Netherlands. The move is the latest sign of escalating tensions between the two sides over control of the company's operations.

In a letter sent over the weekend, Nexperia China said it was an “independent entity in China,” and that employees had the right to refuse outside requests without being considered a violation of labor regulations. The notice also said that Chinese managers would take over all domestic operations.

According to SCMP , the document applies to Nexperia’s assembly plant in Dongguan, which accounts for about 70% of the company’s global production, as well as branches in Shanghai, Beijing, Shenzhen and Wuxi. In the letter, the company also stressed that the salaries and benefits of Chinese employees are paid directly by the local branch, independent of the Dutch headquarters.

This is considered a strong reaction by Nexperia China after the Dutch government intervened in the parent company's governance structure, fired Chinese CEO Zhang Xuezheng and took control of the executive board, citing national security concerns. This move comes in the context of the Netherlands' concern that Wingtech Technology, the group that has owned Nexperia since 2019, could move its production lines from Europe to China.

In response, on October 4, the Chinese Ministry of Commerce issued an export control order against Nexperia China and its subcontractors, banning the export of domestically produced components abroad. This move is considered a direct counterattack in the confrontation between Beijing and The Hague over control of strategic technology.

Many workers at the Dongguan plant, which plays a key role in the global semiconductor supply chain and is one of Nexperia’s largest manufacturing facilities, are now expressing concern that they could become “collateral damage” in the political and economic conflict.

For its part, Nexperia’s headquarters in the Netherlands told Reuters that employees in China still had access to company systems and were paid as normal. But observers say the public internal split is rare in the tech industry and reflects the deepening tensions between Western governments and Chinese companies over control of the global semiconductor supply chain.

Source: https://znews.vn/mau-thuan-ky-la-nhat-nganh-chip-post1595353.html