Nexperia cuts supply to Dongguan factory, Chinese related manufacturers admit it's difficult to find suitable alternatives in the short term
Nexperia Netherlands will stop supplying wafers to its Dongguan factory starting October 26. Although Nexperia China stated that supply remains stable, related companies such as Shenglue Electronics, China Electric Port, and Willas-Array expressed difficulty in finding suitable alternatives in the short term. China Electric Port stated that its cooperation with Nexperia accounts for a small proportion and that it is procuring normally through overseas channels. Shenglue Electronics indicated that it has reserved other alternative products to mitigate risks. Willas-Array has not clearly responded regarding when supply will resume
According to a report from Economic Information Daily on the 4th, Anshi China announced on November 2nd that Nexperia, based in the Netherlands, unilaterally decided to stop supplying wafers to its packaging and testing factory (ATGD) located in Dongguan starting from October 26th. Although Anshi China has conveyed stable signals externally, the real feelings of the upstream and downstream supply chain are still key to assessing risks. Several listed companies, including Shenglian Electronics (Shenzhen: 300975), Willas-Array (00854), and Zhongdian Port (Shenzhen: 001287), are agents for Nexperia's products. The Daily Economic News called these companies as an investor to understand their responses and strategies.
A staff member from the securities department of Zhongdian Port, a distributor of Nexperia, stated that the related business accounts for a very small proportion of the company's overall revenue, with an annual cooperation scale of about 100 million yuan (RMB, the same below), while the company's total annual revenue reaches 40 to 50 billion yuan. Currently, the company is sourcing normally through overseas procurement channels (via Hong Kong), and the supply of Nexperia's products has not yet been affected. However, Zhongdian Port candidly acknowledged the long-term uncertainty and the difficulty in finding substitutes for Nexperia's products, especially in the field of automotive-grade power devices, where the domestic substitution rate is currently low, making it difficult to find suitable alternatives in the short term.
Shenglian Electronics (Shenzhen: 300975), which lists Nexperia as one of its core cooperative manufacturers, responded that the company is still acting as an agent for Nexperia's products, and the cooperation has not been significantly affected. They emphasized that the company's business does not solely rely on Nexperia, and they have reserved other substitute products to mitigate potential risks. Regarding similar alternative brands, Shenglian Electronics declined to provide detailed information, citing "inconvenient to disclose information."
Nexperia's distributor Willas-Array (00854) only replied on its electronic service account that "Nexperia has no stock," and when asked "when will there be stock," they responded, "uncertain." (wn)
