The leading producer of vital semiconductors, including transistors and diodes, Nexperia, revealed on Thursday that it will invest$200 million in manufacturing capacity at its main plant in Hamburg, Germany. With this step, Nexperia-a Dutch business controlled by the Chinese electronics manufacturer WingTech (600745. SS)-makes a substantial investment in European computer chip manufacturing independent of the EU's Chips Act, which was introduced in 2023.

As the European Union considers possible unfair subsidies from China in producing "legacy" chips used in cars and household appliances in Europe by companies like Nexperia, the Dutch company announced a significant investment decision. Chief Financial Officer Stefan Tilger underlined how vital their products are to advancing renewable energy, electric vehicles, and digitisation. Producing 100 billion chips annually, Nexperia accounts for nearly a quarter of the global supply. Their production occurs in Europe, with assembly and packaging facilities in China, Malaysia, and the Philippines.

After being acquired by WingTech for$3.6 billion in 2018, Nexperia, based in Nijmegen, Netherlands, has faced growing scrutiny from European governments. In 2022, the British government recently required Nexperia to sell a factory in Newport due to security concerns.

The German government refused to subsidy Nexperia in 2023 for creating a battery-efficiency technology. In addition, following a retrospective review, the Dutch government authorised Nexperia's acquisition of the startup Nowi. Nexperia plans to establish two "wide bandgap" chip production lines in Hamburg as part of its expansion plans. These chips use Silicon Carbide (SiC) and Gallium Nitride (GaN), vital electrical infrastructure components. Because of these chips' efficiency, speed, lightweight design, and capacity to function in extremely hot and high-voltage environments, they have an advantage over conventional silicon processors.