Following the dual sanctions imposed on Nexperia by China and the Netherlands, the global power semiconductor market has fallen into a severe supply-demand imbalance. With China's official export restrictions and shipments from Nexperia's Dongguan plant hindered, industry sources suggest a new wave of price increases is imminent for key components like diodes and MOSFETs, potentially reaching double-digit levels.

Nexperia, a key global supplier of automotive components, has seen shipments disrupted and shifts reduced, plunging the global automotive industry into a supply chain crisis. Nexperia, a subsidiary of Chinese tech giant Wingtech, holds a key position in the global automotive supply chain, counting Volkswagen, BMW, and Mercedes-Benz among its clients.

A Shenzhen electronics distributor stated that since mid-October, MOSFET and diode inventory has become significantly tight, with lead times for automotive-grade parts extending to over 12 weeks. He stated, "After the Nexperia factory halted production, not only have lead times lengthened, but some models have also seen price increases. Downstream customers, fearing further price increases, have been stockpiling parts in advance."

Initial market estimates suggest that MOSFET and diode prices are expected to increase by 5% to 15% in the fourth quarter, with high-end automotive and industrial control components potentially exceeding 20%. Some distributors caution that if this upward trend continues, a repeat of the "material shortage" experienced during the pandemic will occur.

Industry analysts believe that Nexperia's shutdown has created a supply and demand vacuum in the market. This, combined with the rapidly growing demand in the AI and automotive markets, is driving the power component market into a new cycle of price increases. Take AI servers, for example. Their high-power architecture requires a large number of power switching components and protection modules. An AI server requires three to five times more MOSFETs than a typical server. In the electric vehicle sector, demand for high-voltage, high-efficiency power chips is rapidly increasing, driving up demand for rectifiers and protection components.

The Ansem storm originated after the Netherlands forcibly took over Ansem, a wholly-owned subsidiary of Wingtech. The Chinese Ministry of Commerce subsequently imposed export controls on Ansem, prohibiting the export of products produced in China and posing a dilemma.

The negative impact has extended to the production and supply chain. Chinese media reported that Ansem's Dongguan factory has restricted shipments since the National Day holiday and plans to implement a "four days on, three days off" work schedule starting this week. Traders report product shortages and price increases, and European and American automakers are urging a swift resolution to the supply disruptions faced by Ansem Semiconductor, citing the potential for serious consequences. According to the National Business Daily, employees at Ansem's Dongguan factory stated that due to raw material shortages and staffing issues, in addition to adjusting workdays, overtime hours have also been reduced from 70 to 80 hours per month to 40 to 50 hours. Warehouse staff also stated that after the National Day holiday, incoming inventory has consistently outpaced outgoing inventory.

About Ansem

Ansem is a leading global power chip IDM and one of the world's leading automotive semiconductor companies. It ranks first globally in small-signal diode and transistor shipments, second globally in logic ICs, first in ESD (electrostatic discharge) protection devices, first globally in small-signal MOSFETs (core components for power supply and power control), and second globally in automotive-grade power MOSFETs.

Wingtech disclosed that mainland China currently accounts for 80% of Ansem's production capacity, and that the mainland market accounts for approximately 50% of Ansem's global sales. This means that if Ansem's products produced in mainland China cannot be exported, it will have a significant negative impact on Ansem itself and the European and American automotive manufacturing industries.

Source: Content from Economic Daily

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