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Nexperia’s China unit pivots to domestic 12-inch wafers in pursuit of ‘100%’ independence

The Chinese division is betting on a high-stakes, home-grown supply chain pivot to bypass suspended European wafer shipments

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An employee works with a wafer on a production line of semiconductor firm Nexperia in Hamburg, Germany, on June 27, 2024. Photo: Reuters
Coco Fengin Guangdong

The China unit of Dutch chipmaker Nexperia has announced plans to shift its entire product line to a domestic 12-inch silicon wafer foundry, pursuing what it calls “independent operations” amid a nearly one-year-long dispute with its European headquarters.

Speaking at a press conference themed “based in China, serve the world” on Sunday, Nexperia’s China team – which used to source wafers from the firm’s European fabrication plants – said it was moving towards “100 per cent domestic production”, according to reports by local media outlets.

The unit’s supply-chain bottlenecks stem from a dispute between Nexperia’s Dutch headquarters and its Chinese parent company, Wingtech Technology, which owns the semiconductor firm. Caught between the conflicting parties, Nexperia’s Chinese operations have been cut off from crucial European wafer supplies.

A central update from the Sunday briefing was a shift to a new 12-inch wafer supply provided by an unnamed “Chinese strategic partner”. Nexperia China is now transferring all its products from its previous 8-inch and 6-inch production lines.

In semiconductor manufacturing, chips are cut from thin discs of silicon called wafers. Larger wafers typically produce more individual chips, lowering costs. Nexperia China said its new supply could achieve “unparalleled cost efficiency”, noting that a 12-inch wafer provided about four times the surface area of a 6-inch wafer and 2.25 times that of an 8-inch one.

Following a March milestone in which the unit announced it had achieved “small-volume production” of bipolar discrete devices, the firm said on Sunday that its broader product portfolio – including diodes, metal-oxide-semiconductor field-effect transistors and logic integrated circuits – would be made entirely from 12-inch wafers.

Previously, Nexperia operated under an integrated global supply chain, with raw wafers produced in German and British fabrication plants shipped for assembly to China – which is responsible for about 70 per cent of the firm’s global output – as well as Malaysia and the Philippines.

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