(Yicai) Sept. 23 -- With Wingtech Technology’s dispute over control of its Netherlands-based subsidiary Nexperia still unresolved, Nexperia Semiconductors China is rebuilding its domestic supply chain after the split with its Dutch operations disrupted access to overseas wafers, with its Dongguan assembly and test plant playing a key role in the effort.

Before the dispute erupted a year ago, about 70 percent of Nexperia’s shipments were from the outsourced semiconductor assembly and test plant in Dongguan, Nexperia China’s marketing head told Yicai.

In the fourth quarter of last year, the company began searching for alternative solutions for transistor wafers. It teamed up with Chinese manufacturers to bring in a 12-inch wafer platform at the end of the first quarter of this year and gradually achieved risk production in July and August.

As its wafer output capacity gradually comes on stream, the Dongguan OSAT plant is gradually recovering production, the executive noted.

Last September, the Dutch government issued a ministerial order on national security grounds curbing Wingtech’s governance rights, requiring Nexperia and its 30 global entities not to make any changes to their assets, intellectual property, business, or personnel for a year.

Wingtech’s control over Nexperia’s overseas entities has been restricted since then, and Nexperia has been divided into two systems, one under the control of its Dutch headquarters, and the other under that of Nexperia China.

Nexperia has research and development centers in the Netherlands, the United Kingdom, Germany, and China, wafer manufacturing bases in Hamburg in Germany and Manchester in the UK, and OSAT plants in Dongguan and Wuxi in China, Malaysia, and the Philippines.

Because of the control dispute, Nexperia China cannot obtain wafers from Nexperia’s overseas factories, while its HQ in the Netherlands has no access to OSAT plants in China controlled by the local subsidiary.

“Nexperia’s Wuxi OSAT plant is also doing some pilot production to make models usually produced by Nexperia’s OSAT plants in Malaysia and the Philippines,” the executive noted, predicting that the unit’s three main product lines will complete a fully domestic supply chain by the end of this year.

Even after other makers of power semiconductors raised prices, Nexperia China priced several devices launched in August on its new 12-inch wafer process platform at less than their predecessors.

The price cuts did not eat into profit mainly because the cost competitiveness of 12-inch wafers is higher than that of eight-inch wafers, and the die count of 12-inch wafers is 2.2 to 2.5 times more than that of eight-inch ones, the person said, adding that manufacturing technologies at the plants can also improve capacity utilization and yields.

Some other power semiconductor manufacturers have expanded capacity this year, partly in response to stronger demand driven by the buildout of artificial intelligence infrastructure. Industry sources told Yicai that this it is probably because they have taken some of Nexperia China’s market share.

Editor: Futura Costaglione