Nexperia says Chinese unit operating as usual as tensions with the Netherlands run high

By Che Pan and Brenda Goh BEIJING (Reuters) -Nexperia said on Sunday that its employees in China still have access to company platforms and are receiving salaries as usual, a day after its China unit asserted that it had the right to operate independently of the Dutch parent. "We are aware of a message circulated by individuals at Nexperia China falsely claiming that Nexperia and the Dutch government have abandoned the Chinese market and that the factory is now operating under a new entity," the Dutch chipmaker told Reuters. The company said any statements about salaries not being paid are "factually incorrect and misleading." On Saturday, Nexperia's China unit said it complies with Chinese laws and has the right to operate independently, a day after the Netherlands said talks had begun to try to ease tensions over export controls. A notice on its official WeChat account said all of its employees continue to work under the unit's instructions, and may reject any "external instructions" not approved by its Chinese legal representative. It said salaries and bonuses will continue to be paid out by Nexperia China, not Nexperia Netherlands. Amid the United States and China trade tensions, the Dutch government took control of Nexperia on September 30 and removed its Chinese CEO, Zhang Xuezheng. The Dutch government cited the possible transfer of technology to Nexperia's Chinese parent company, Wingtech. Nexperia makes chips for carmakers and for consumer electronics. Days later, China's commerce ministry on October 4 blocked Nexperia from exporting chips from China. "This situation has arisen from the unauthorised actions of our former CEO Wing Zhang (Xuezheng), who has been formally suspended by a competent court…and has no authority to represent Nexperia," the Dutch chipmaker said. Nexperia has reported Zhang's actions to Dutch authorities and said it remains committed to employees and customers in China. Nexperia did not specify what unauthorised actions its former CEO had taken. Wingtech and Nexperia China did not immediately respond to requests for comment.  The dispute has raised fears in the global automotive and electronic industries of possible chip shortages that could disrupt production.   Nexperia's chips, though not technically sophisticated, are widely used in high volumes.  Its biggest manufacturing site is in Hamburg, Germany, but according to two sources briefed on the matter, more than 70% of Nexperia's chips are shipped back to China to be packaged in Dongguan, a manufacturing hub in China's southern Guangdong province. Volkswagen and BMW both said they were working to identify potential supply risks, but that production in Europe had not been impacted yet. ($1 = 7.1264 Chinese yuan renminbi) (Reporting by Che Pan and Brenda Goh; editing by Barbara Lewis and Michael Perry)

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