Nexperia, a leading global manufacturer of basic semiconductors like diodes and transistors, announced on Thursday a $200 million investment to boost capacity at its main production facility in Hamburg, Germany.
This significant investment by the Dutch-headquartered Nexperia, owned by Chinese electronics giant WingTech (600745.SS), stands out as a rare instance of a computer chip investment in Europe without reliance on state subsidies provided under the EU’s Chips Act launched in 2023.
The announcement comes amid the European Union’s ongoing evaluation of whether China is unfairly subsidizing domestic production of “legacy” chips, commonly used in cars and household appliances, which are also produced by Nexperia in Europe.
“Electric cars, green energy, and digitalization are inconceivable without our products,” said CFO Stefan Tilger in a statement. “They are the essential components that enable new technologies.”
Nexperia produces 100 billion chips annually, accounting for nearly a quarter of the global supply, with manufacturing operations in Europe and assembly and packaging facilities in China, Indonesia, and the Philippines. However, since its $3.6 billion acquisition by WingTech in 2018, the Nijmegen, Netherlands-based company has faced increased scrutiny from European governments.
In 2022, the British government mandated that Nexperia divest a factory in Newport, citing national security concerns. Additionally, in 2023, the German government disqualified Nexperia from receiving a subsidy to develop battery efficiency technology, while the Dutch government approved its acquisition of the startup Nowi only after retroactive review.
Nexperia’s expansion plans in Hamburg include the addition of production lines for two types of “wide bandgap” chips, which utilize Silicon Carbide (SiC) and Gallium Nitride (GaN). These advanced chips are preferred over traditional silicon chips due to their superior efficiency, speed, lightweight nature, and ability to operate under high temperatures and voltages.
