Why Dutch chipmaker Nexperia has paused salaries of Chinese employees
What's the story
Nexperia, a leading Dutch semiconductor company, has suspended salary payments and access to work accounts for its employees in China. The decision was communicated by the company's Chinese unit on Friday. The move comes amid a growing political dispute between the Netherlands and China. "We are deeply puzzled and disappointed," said the unit in a letter cited by Electrans, a Chinese tech news outlet.
Reaction
'Ruthless suppression'
The Chinese unit of Nexperia expressed its discontent over the recent developments, calling it a case of "ruthless suppression." The subsidiary also claimed that the current European management seemed to be "abandoning" the Chinese market. This comes after Wingtech Technology, a Chinese electronics manufacturer that acquired Nexperia in 2019, confirmed that access to work accounts for Nexperia's China team was blocked for "unknown reasons."
Intervention
Dutch government took over Nexperia's management
Earlier this month, the Dutch government took over Nexperia's management and removed its Chinese CEO Zhang Xuezheng over national security concerns. The former CEO Frans Scheper had said that the Dutch government was worried about a possible shift in chip production from Europe to China. In light of these developments, Nexperia's Chinese unit has taken "self-rescue measures" to ensure supply for domestic customers by building a local supply chain.
Precautions
Preparing for possible cut-off from Europe
The Chinese unit of Nexperia has prepared for a possible cut-off from Europe, both in terms of systems and funding. This was reported by Yican, a Chinese media outlet, citing Wingtech. The move by the Dutch semiconductor company highlights the growing tensions between China and the Netherlands, amid new export controls imposed by the US last month.