A significant internal conflict has emerged at Nexperia, the Dutch semiconductor manufacturer owned by China’s Wingtech Technology Co. The company’s China-based leadership has instructed employees to disregard a direct order from the corporate headquarters in the Netherlands concerning compliance with U.S. sanctions.

The dispute centers on business dealings with a Russian entity, highlighting the operational challenges faced by Chinese-owned international firms navigating complex geopolitical sanctions. The Dutch head office’s directive aimed to align the company with U.S. regulations, but this was openly contested by management in China.

Directive to Comply with US Sanctions

On May 16, 2024, Nexperia’s Chief Operating Officer, Charles Smit, issued a formal order via email to company staff. The directive instructed employees to sever all business connections with the Russian company JSC ODB-Avia. This action followed the addition of JSC ODB-Avia to the U.S. Bureau of Industry and Security’s entity list in March 2024, a measure taken in response to Russia’s invasion of Ukraine. Nexperia had previously sold millions of dollars worth of components to the Russian firm.

China Leadership Orders Staff to Ignore Directive

The day after Smit’s email, on May 17, 2024, Wingtech Chairman Zhang Xuezheng, who also holds a senior position at Nexperia, held a meeting with managers in Hong Kong and China. During this meeting, Zhang instructed them to ignore the order from the Dutch headquarters. An internal memo summarizing the meeting quoted Zhang as saying, “Nexperia is a Dutch company with a Chinese shareholder, so we must follow the Chinese and Dutch laws. It is not our choice to follow any US law.” The memo also noted that Zhang stated Smit lacked the authority to make such a decision, creating a direct standoff between the company’s Chinese ownership and its Dutch operational management.

Source: https://finance.yahoo.com/news/nexperia-china-tells-employees-ignore-093000509.html