Dutch chipmaker Nexperia has suspended supplies of wafers to its Chinese assembly plant, a letter addressed to its customers reviewed by Reuters showed, a move that could worsen a supply squeeze that is worrying automakers worldwide.

The letter, dated October 29, which was signed by Nexperia's interim CEO Stefan Tilger, said the company had imposed the suspension on October 26, citing "a direct consequence of the local management's recent failure to comply with the agreed contractual payment terms."

Nexperia, Nexperia China and the company's Chinese owner Wingtech Technology did not immediately respond to requests for comment.