China Issues Warning as Global Chip Crisis Worsens, Says World Feels the Impact
China’s Ministry of Commerce has warned of a worsening chip crisis in 2026 following a new conflict between Dutch semiconductor producer Nexperia and its Chinese subsidiary, according to Reuters.
The world has been gripped by a semiconductor shortage since late 2025. The rapid advancement of artificial intelligence technology has prompted chipmakers to prioritise high-performance chips for AI applications, known as high bandwidth memory (HBM), over conventional chips for consumer electronics such as mobile phones and laptops.
HBM chip production is more profitable, leading manufacturers to deprioritise conventional chips. Meanwhile, demand for both HBM and conventional chips has surged simultaneously, creating market shortages and triggering sharp price increases across both segments. The escalating conflict between Nexperia and its Chinese subsidiary has intensified the crisis and impacted the technology industry globally.
As early as October 2025, automotive production had already been disrupted when Beijing imposed export controls on Nexperia chips manufactured in China. This followed The Hague’s takeover of the company from its Chinese parent company, Wingtech. Nexperia chips are widely used in automotive electronic systems.
Although the chip shortage temporarily eased following diplomatic negotiations, the conflict between Nexperia’s Dutch headquarters and its China-based unit has continued to escalate.
Nexperia in the Netherlands supports the removal of Wingtech’s controls, whilst Wingtech wishes to maintain its position. Beijing’s latest warning came on Saturday, 8 March local time, a day after Nexperia’s packaging unit in China accused its Dutch parent of shutting down employee office accounts in China.
“This triggers a new conflict and creates new difficulties and challenges in the company-to-company negotiation process,” said China’s Ministry of Commerce in a statement published on its official website.
“Nexperia in the Netherlands has seriously damaged the normal operations and production processes of its Chinese branch. This has again triggered a crisis in semiconductor production and global supply chains. The Netherlands bears full responsibility for this situation,” the ministry added.
In its statement, Nexperia’s Dutch entity did not deny its latest action. However, it disputed its Chinese subsidiary’s claim that the measure had impacted production at the assembly and testing facility in Guangdong Province.
Nexperia’s Chinese subsidiary responded to the removal of Wingtech’s controls in September 2025 by declaring itself an independent entity separate from its Dutch parent.
Since then, both entities have been locked in a heated trade dispute. The Dutch parent has also suspended wafer supplies to the Guangdong facility.
Mediation efforts from Beijing, The Hague, and Brussels have so far failed to produce a significant compromise. Beijing has accused The Hague of doing insufficient to force Nexperia’s Dutch headquarters to make concessions or end court proceedings in Amsterdam that transferred Wingtech shares to a Dutch lawyer in October 2025.