Chinese company Wingtech will continue to ship chips despite the blockade against its subsidiary Nexperia.

Chinese group Wingtech Semiconductor assured on Sunday that it will be able to maintain the supply of chips to its customers despite the interruption of shipments from its Dutch subsidiary Nexperia, the center of a trade dispute between China and the Netherlands that threatens to worsen the global shortage of semiconductors.

In a letter sent to its customers, Wingtech reported that Nexperia Netherlands stopped sending silicon wafers used to manufacture chips to its assembly and testing plant in the Chinese city of Dongguan on October 26, alleging supposed non-payments by the local management.

The Chinese parent company called those accusations "false" and stated that, on the contrary, it is Nexperia that owes the Dongguan plant about 1 billion yuan (140 million dollars - 121 million euros).

According to the company, it has accumulated sufficient inventories of finished and in-process components "to fulfill orders through the end of the year and beyond."

Wingtech added that it has put contingency plans in place to bolster its production and avoid future disruptions, at a time when European automakers are warning of potential shutdowns of their assembly lines due to a lack of components.

The conflict originated in late September, when the Dutch government intervened in Nexperia, citing national security reasons to prevent the transfer of technology to China.

In response, Beijing banned the export of chips manufactured by the company from its Chinese plant, a move that affected the global supply.

On Saturday, the Chinese Ministry of Commerce announced it would grant exemptions to exports from companies that meet certain requirements to alleviate the crisis, while the European Commission confirmed that China's suspension of export controls on strategic materials also applies to the European Union.

Nexperia, founded in the Dutch city of Nijmegen and acquired by Wingtech in 2019 , produces semiconductors commonly used in automobiles and electronic devices.

Its plant in Dongguan, in southern China, has maintained limited operations since the imposition of export bans.