Chinese-owned chipmaker Nexperia invests $200 million in European expansion

FILE PHOTO: The logo of computer chipmaker Nexperia is seen in Nijmegen, Netherlands April 12, 2024. REUTERS/Piroschka van de Wouw/File Photo

(Corrects to read Malaysia (not Indonesia), in paragraph 5)

By Toby Sterling

AMSTERDAM/HAMBURG (Reuters) -Nexperia, one of the world's largest makers of basic semiconductors such as diodes and transistors, said on Thursday it would invest $200 million to expand capacity at its main production site in Hamburg, Germany.

The investment by Dutch-headquarted Nexperia, owned by Chinese electronics maker WingTech, is a rare example of a computer chip investment made in Europe without assistance from state subsidies under the EU's Chips Act launched in 2023.

It also comes as the European Union is considering whether China is unfairly subsidising domestic Chinese production of "legacy" chips, found in cars and household appliances, such as those made in Europe by Nexperia.

Electric cars, "green energy and digitalization are inconceivable without our products," CFO Stefan Tilger said in a statement announcing the investment decision. "They are the nuts and bolts that make new technologies possible."

Nexperia makes 100 billion such chips annually, nearly a quarter of the world's supply, with production in Europe and assembly and packaging in China, Malaysia and the Philippines.

However, since its $3.6 billion acquisition by WingTech in 2018, Nijmegen, Netherlands-based Nexperia has been subjected to increasing scrutiny by European governments.

In 2022, the British government forced it to divest a factory in Newport, citing security concerns.

In 2023 the German government disqualified it from receiving a subsidy to develop a battery efficiency technology. And the Dutch government approved its purchase of Nowi, a startup, after retroactive vetting.

Nexperia plans to add lines in Hamburg making two types of "wide bandgap" chips, which have important uses in electrical infrastructure, using Silicon Carbide (SiC) and Gallium Nitride (GaN).

These chips are favoured over regular silicon chips for their efficiency, speed, light weight, and ability to function under hot conditions and high voltages.

Nexperia was spun out of NXP, the former chipmaking arm of Philips, in 2017.

($1 = 0.9352 euros)

(Reporting by Toby Sterling; Editing by Emelia Sithole-Matarise)