Nexperia China resumes domestic sales, insists on yuan settlement

Nexperia’s China-based unit has restarted domestic chip deliveries after a weeks-long freeze triggered by Beijing’s export ban.

But every single sale must now be settled in Chinese yuan, not in U.S. dollars or any other foreign currency, according to Reuters, citing two people familiar with the situation.

The change comes after Beijing banned all chip exports on October 4, following the Dutch government’s takeover of Nexperia on September 30.

The Dutch moved to remove Zhang Xuezheng, the company’s Chinese CEO, and took direct control of operations, citing concerns that Wingtech Technology, Nexperia’s parent in China, could siphon sensitive technology.

The Dutch government claims the trigger was corporate governance issues, but U.S. pressure played a huge role, seeing as Wingtech had already landed on a restricted export list in Washington.

China factory halts exports, resumes domestic trade in yuan

Nexperia’s Chinese unit, which halted all shipments after the October 4 order, has now resumed supplying chips only inside China, but under strict new conditions. Distributors are being told they must settle all purchases in yuan, and are not allowed to use U.S. dollars, according to sources who spoke on condition of anonymity.

Even more, distributors have been instructed to only use yuan in downstream sales to their own customers. One of the people said the move is aimed at keeping supply inside China stable while breaking away from the Dutch parent’s control. Nexperia, which still produces its chips in the Netherlands, relies on China to package a large portion of them before distribution.

But that packaging partnership may soon shift. Nexperia is now looking for other packaging firms outside China, after tensions with its own Chinese arm escalated. While the company says this plan had been in place before the dispute, people briefed on internal strategy say the search for new partners has picked up urgency.

At the same time, Nexperia has warned Chinese customers that it doesn’t guarantee the quality of products sourced from its China subsidiary. According to the second person familiar with the matter, that warning was sent out quietly. A Nexperia spokesperson didn’t deny this, only stating that the company “had to inform customers of potential risks,” but stopped short of telling them to avoid buying from the Chinese unit altogether.

Beijing backlash intensifies rift with Dutch parent

The Chinese unit is clearly pissed. It didn’t respond directly to Reuters but later posted a public message on WeChat claiming it is “operating independently” and that manufacturing and business activities remain normal. It also accused the Dutch parent of spreading “groundless doubt” about product compliance and said it would be pursuing legal options.

The suspension of exports has already shaken automakers.The Japan Automobile Manufacturers Association said its members were told by a Dutch chipmaker that it can’t guarantee steady deliveries, a major red flag for Japanese auto part suppliers.

That could spill into production timelines globally, especially since Nexperia makes high-volume, basic chips used in nearly every vehicle.

Meanwhile, the German economy ministry said it’s setting up urgent calls with automakers and suppliers to address fallout from the Nexperia situation. The Dutch economy minister has also spoken with his Chinese counterpart but admitted no resolution was reached.

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