Nexperia Invests $200 Million in German Semiconductor Expansion Amid EU Scrutiny

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Nexperia, a leading global producer of fundamental semiconductors like diodes and transistors, announced on June 27 a $200 million investment to enhance capacity at its primary manufacturing site in Hamburg, Germany. 

This investment, made by the Dutch-headquartered Nexperia, which is owned by Chinese electronics company WingTech, stands out as a rare instance of a semiconductor investment in Europe without the support of state subsidies from the EU’s Chips Act introduced in 2023.

The announcement coincides with the European Union’s deliberations on whether China is unfairly subsidizing its domestic production of ‘legacy’ chips, commonly used in cars and household appliances, similar to those manufactured by Nexperia in Europe. 

Stefan Tilger, Nexperia’s CFO, highlighted the importance of their products, stating, that electric cars, green energy, and digitalization were unimaginable without their products. He further stated that they were essential components that enabled new technologies.

Nexperia produces 100 billion such chips annually, accounting for nearly 25% of the global supply, with manufacturing based in Europe and assembly and packaging in China, Indonesia, and the Philippines. Since its $3.6 billion acquisition by WingTech in 2018, Nexperia, based in Nijmegen, Netherlands, has faced increasing scrutiny from European governments.

In 2022, the British government mandated the divestment of a Newport factory, citing security concerns. In 2023, the German government excluded Nexperia from receiving a subsidy for developing battery efficiency technology. Additionally, the Dutch government approved Nexperia’s acquisition of the startup Nowi after retroactive vetting.

Nexperia plans to expand its Hamburg facility by adding production lines for two types of ‘wide bandgap’ chips, which are crucial for electrical infrastructure. These chips, made using Silicon Carbide (SiC) and Gallium Nitride (GaN), are preferred over traditional silicon chips due to their efficiency, speed, lightweight, and ability to operate under high temperatures and voltages.

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