Exclusive-Nexperia customers in talks over workaround to skirt Europe-China chip feud, sources say

By Toby Sterling

AMSTERDAM (Reuters) -Customers of Chinese-owned Dutch chipmaker Nexperia are moving with the institution connected a workaround to bypass a feud betwixt the Europe-based portion and its packaging works successful China, ​two sources adjacent to the steadfast told Reuters.

The workaround, antecedently unreported, is not a imperishable solution, nor feasible ‌for smaller clients, but offers a spot that could relieve immoderate unit connected the car market, wherever a scarcity of Nexperia chips has dented immoderate accumulation ‌of cars and parts.

A standoff betwixt the European broadside of the concern and its Chinese plant, sparked by the seizure of Nexperia by the Dutch authorities implicit fears of exertion transfer, has snarled proviso of its chips that are cardinal for the planetary automotive market.

Nexperia makes wafers, the basal worldly for making aggregate chips, successful Europe, which are past sent to its works successful Dongguan successful China wherever they ⁠are chopped and packaged. However, owed ‌to the standoff the European broadside has halted shipments to China.

Now immoderate clients are moving with Nexperia Europe to acquisition silicon wafers straight from its mill successful Hamburg, separately transport them to China, and determination ‍contract the Dongguan works for the last packaging, sources said.

Reuters could not found which clients were successful talks implicit the workaround oregon if immoderate had yet moved ahead. Automakers and suppliers usage Nexperia chips, including Volkswagen, Hella, Bosch, Aumovio and Honda.

A spokesperson for Nexperia said the ​company was moving to enactment customers successful each mode it could, without commenting connected circumstantial plans. A spokesperson for Nexperia'‌s Chinese genitor Wingtech declined comment.

NEXPERIA WORKAROUND A 'SHORT-TERM PATCH'

The Chinese authorities gave immoderate impermanent alleviation to carmakers this week by relaxing export controls connected chips made by the Dongguan plant. A Dutch delegation is expected to question to China adjacent week for further talks.

The workaround attack treats Nexperia astir arsenic 2 abstracted accumulation and packaging companies. It would temporarily code prime concerns astir chips being packaged successful Dongguan, which has already been operating independently, portion each limb of the institution would inactive beryllium paid for its work.

Nexperia halted ⁠shipment of wafers to its Chinese subsidiary connected October 26, citing nonpayment.​ The Chinese limb is presently selling down stockpiles of the company's finished ​products. It is not definite however agelong those stockpiles volition last.

"A batch of companies are presently negotiating and immoderate already are buying wafers from Nexperia EU and providing them to Nexperia China to get exclusive accumulation ‍for themselves," 1 source,⁠ a distributor of Nexperia products, said.