Semiconductor Manufacturing in Transition Nexperia Dispute Leads to the Emergence of Two Supply Chains

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The power struggle over Nexperia is transforming semiconductor manufacturing. While the Dutch headquarters is expanding its capacity outside of China, the Chinese division is developing its own supply chain. This requires investment on both sides.

The conflict between the Dutch semiconductor manufacturer Nexperia and its Chinese owner Wingtech is increasingly taking its toll on production. Since October 2025, the Dutch company has no longer had control over its assembly and testing facilities in Guangdong and Wuxi. While management in Nijmegen is establishing alternative manufacturing capacities, the Chinese division is organizing its own wafer supply chain with local manufacturing partners. As a result, what was once an integrated manufacturing operation is now splitting into two largely separate supply chains.

At the Pretzl Connect industry conference, Olaf Vogt, Director and Head of Product, Application Marketing, and Engineering at Nexperia, spoke about the consequences. The company has been working since the end of last year to restore its ability to deliver. “Investments in our assembly plant in Malaysia and our facility in the Philippines are increasing dramatically,” Vogt explained. At the same time, he acknowledged that Nexperia is still recovering from a difficult period.

China Is Building Its Own Wafer Supply Chain

The Chinese side has also responded to the split. As reported by the Chinese business magazine Yicai Global reported, Nexperia China has been working with local manufacturers on alternative wafer supplies since the fourth quarter of 2025. By the end of the first quarter of 2026, a new 12-inch wafer platform had been developed, which entered trial production in July and August.

As a result, the assembly and testing plant in Dongguan is also expected to gradually ramp up its capacity again. According to a company representative, trials are also underway at the Wuxi site with products that were previously manufactured in Malaysia and the Philippines. By the end of 2026, the Chinese division aims to establish a fully domestic supply chain for three key product lines.

Parallel Production Requires Capital

The separation of supply chains is likely to result in additional work. Both sides are establishing alternative sourcing and manufacturing channels. Nexperia is expanding its capacity in Malaysia and the Philippines and, in September, entered into a partnership with Tata Electronics in India. This partnership covers wafer manufacturing as well as assembly and testing.

In June 2026, the Malaysian investment agency MIDA put the value of an approved expansion investment in Seremban at 1.6 billion ringgit. As early as 2021, Nexperia had announced investments of the same amount to be made by 2026. It is not clear from the publications whether both figures refer to the same expansion project.

Capital is also flowing into alternative manufacturing processes in China. However, the Chinese division expects lower unit costs from the larger 12-inch wafers. It is not yet known to what extent the separation of supply chains will affect production costs overall.

Legally, the dispute remains unresolved. A Dutch court has placed Wingtech’s majority voting rights under independent administration. Meanwhile, in China, Wingtech is seeking damages from Nexperia. Regardless of the outcome of the legal dispute, both sides are now establishing their own production structures, which could have long-term consequences for the cost and supply of semiconductors.

New Escalation

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