The Chinese unit of Nexperia is moving to line up domestic suppliers of silicon wafers while expanding its packaging operations within China.

The move comes as the company looks to stabilise production after supply disruptions caused by an ongoing corporate dispute.

Citing a report by Chinese news agency Caixin, Reuters reported the supplier selection process is expected to be largely completed in the first quarter.

The shift comes after wafer deliveries from Nexperia Netherlands were halted, disrupting supplies to the Chinese business.

It was reported in December that the unit had since secured Chinese-made silicon wafers sufficient to meet its entire 2026 output needs for one category of power chip, following the suspension of shipments from the Dutch unit.

The supply freeze followed a decision by the Dutch government in September to take control of Nexperia from Wingtech Technology, citing governance concerns.

Wafer supplies to the Chinese unit were suspended the following month.

In response, Beijing imposed restrictions on exports of Nexperia’s finished products, a move that led to chip shortages for automakers worldwide.

Those curbs were lifted in November, easing pressure on supply chains and signalling a cooling of tensions over the Dutch-based chipmaker.

During the same month, the Dutch government also paused its direct intervention in Nexperia after discussions with Chinese officials.

Securing alternative local suppliers would enable the Chinese operation to continue chip manufacturing without relying on shipments from the Netherlands.

“The current fragmentation leads to duplicated investment and exposes Nexperia to competitive risks, ultimately harming the company’s overall interests,” Wingtech chairwoman Ruby Yang Mu was quoted by Reuters as saying in an interview with Caixin.

Requests for comments were not immediately answered by Nexperia Netherlands.

Despite the easing of measures by both governments last month, legal proceedings and an internal struggle over control of Nexperia remain unresolved.

In December, Wingtech filed an appeal with the Dutch Supreme Court against earlier rulings that stripped it of effective control over its subsidiary.

A Dutch court is scheduled to hear arguments on 14 January on whether to launch a formal investigation into alleged mismanagement at Nexperia.