The medical technology group Philips expanded its supply chain after the Corona crisis and is now unaffected by the semiconductor supply bottleneck. “We don’t just have chips from one supplier, so we don’t have any problems,” said CEO Roy Jakobs on Tuesday in an interview with the F.A.Z. The company has ensured a base of at least two suppliers for its important components (“dual sourcing”). “Since Covid, we have really worked on dual sourcing our products. And that means we don’t have sole suppliers for critical components.”Industrial companies have been faced with a bottleneck since the Chinese-owned chip manufacturer Nexperia, which is based in the Netherlands, has stopped delivering as usual. At the end of September, the Ministry of Economic Affairs in The Hague gave itself veto rights in the company through an emergency law because it feared that the majority owner and then CEO Zhang Xuezheng would withdraw expertise and production to China. In retaliation, the Chinese government suspended deliveries from the factory there, and conversely, the European Nexperia refused to supply the factory with its primary products. This now particularly affects the automotive industry, but also the electrical industry. Federal Minister of Economics Katherina Reiche (CDU) criticized the German economy’s strategic failures to secure its supply chains. “I have little understanding if, after Corona and the gas crisis, some companies still rely on a single-source strategy,” she said recently in Berlin. Affected companies had asked the Ministry of Economic Affairs for help. “We made sure that it didn’t affect us.” Philips has done away with this “single-source strategy”. The industry had suffered from a shortage of semiconductors during the pandemic, especially in 2021. When Jakobs took office in 2022, he announced that his lesson would be to make the supply chain more robust. The group broadened its base not only in terms of supplier companies, but also regionally. He had more produced in the sales markets – which now also benefits him in another context, namely with tariffs in America. Jakobs did not reveal on Tuesday which suppliers Philips and its contract manufacturers purchase chips from. But what happened around Nexperia did not harm the company: “We made sure that it didn’t affect us.” Building a broader supply chain comes at a price. “There are extra costs, but at the same time we have worked hard on our productivity.” Philips has reduced the product portfolio and the number of components – but there are more suppliers for them. Jakobs sees a connection with customer satisfaction. “Our order growth is also so positive because our reliability with customers has increased enormously and they can really trust us.” In the third quarter, incoming orders rose by eight percent. With sales of 4.3 billion euros, the adjusted operating result (Ebita) was 531 million euros.Nexperia formerly belonged to PhilipsNexperia formerly belonged to Philips. In 2006, the then broadly based technology group sold its semiconductor manufacturer NXP, which in turn sold its business with low-priced standard chips in 2017. This business is combined in Nexperia and has been owned by the Chinese Wingtech since 2019, which is listed on the stock exchange and at the same time under state influence. In the dispute over Nexperia, China criticized the government in The Hague again on Tuesday. The Ministry of Commerce in Beijing called on the Netherlands to “stop its interference in the company’s internal affairs” and find a constructive solution to the dispute. Despite repeated and “reasonable demands”, The Hague has not yet shown a constructive attitude.More on the topicNexperia’s main European plant is Hamburg. It makes wafers, which are frying pan-sized silicon disks that serve as the base plate for tens of thousands to hundreds of thousands of chips. They are further processed elsewhere, usually largely at Nexperia’s Dongguan plant in China. It cuts the wafers with diamond tools, glues the individual chips into a structure in specific combinations depending on the application and encapsulates them in miniature housings. This internal Nexperia supply chain is now broken.
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