Nexperia says reunification with Chinese operations remains possible amid ownership dispute

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Nexperia considers China reunification

Highlights

Nexperia and its Chinese operations remain split due to Dutch state intervention, but management says reunification is possible if risks for Europe are avoided.
Wingtech remains the economic owner but lacks control of Nexperia, and rejected a court-appointed proposal to split international and Chinese businesses between new stakeholders.
Nexperia expanded Malaysia operations to offset lost Chinese capacity and reported third-quarter revenue of $389 million, up 9.3% quarter-on-quarter, with $55 million operating cash flow.

Ownership talks and restructuring options

As reported by Reuters, Tilger says a long-term solution for Nexperia's ownership structure is still open, even though the company and its Chinese operations now run as separate businesses. He says negotiations over any permanent arrangement are a matter for Wingtech's board and two Dutch court-appointed officials, while he remains focused on running the business.

Tilger says Wingtech remains the economic owner of the shares but cannot currently exercise control. He adds that if a sale process happens because the split becomes permanent, the Chinese parent should be compensated fairly.

Nexperia's split follows Dutch state intervention last year aimed at preventing the company from moving operations to China. A Dutch court also suspended former chief executive Zhang Xuezheng over suspected mismanagement and removed Wingtech's control, while the Netherlands later suspended its intervention and the parties remain involved in lawsuits.

Last week, Wingtech says it rejected a proposal from the court appointees under which it would control Nexperia's Chinese operations while outside investors would take a controlling stake in the international business. Tilger says he believes Dutch and European authorities would accept a reunification if it does not create risks for Europe's economy and industry.

Supply chain capacity and market demand

Nexperia, which makes basic semiconductors used in cars and consumer electronics, has expanded operations in Malaysia to replace Chinese packaging capacity, Tilger says. Even so, he adds that production remains insufficient to meet market demand.

The company is also benefiting from customer demand for supply chains that are not exposed to China, according to Tilger. The earlier standoff between the Netherlands and China over Nexperia had raised supply concerns for global carmakers and highlighted vulnerabilities in the semiconductor supply chain.

Excluding the Chinese units it no longer controls, Nexperia reports third-quarter revenue of $389 million, up 9.3% from the previous quarter, with operating cash flow of $55 million.

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