The new Volkswagen ID.3 electric car prepares to pass final inspection at the Volkswagen plant in Dresden, Germany, on May 14, 2025.
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German car giant volkswagen warned on Wednesday that it would temporarily halt production of Nexperia’s semiconductors due to China’s export restrictions.
The update comes shortly after the country’s main auto industry association, the German Automobile Industry Association (VDA), said the dispute between China and the Netherlands over Nexperia could lead to “significant production restrictions in the near future” if chip supply disruptions are not quickly resolved.
A Volkswagen spokesperson told CNBC in an email that while NeExperia is not a direct supplier to the company, some NeExperia parts are used in vehicle parts that come from Volkswagen’s direct suppliers.
“Given the current situation, we are in close contact with all stakeholders to ensure that we can identify potential risks early and decide on the necessary measures,” a Volkswagen spokesperson said, noting that the company’s production is not affected at this time.
“However, given the changing situation, a short-term impact on production cannot be ruled out,” they added.
Volkswagen shares were trading down about 2% as of 1:15 p.m. London time (8:15 a.m. ET).
Last month, in what appeared to be a highly unusual move, the Dutch government acquired Nexperia, a Chinese-owned semiconductor manufacturer based in the Netherlands.
The Dutch government took control of the company, which specializes in the mass production of chips used in cars, consumer electronics and other industries, citing concerns that its technology “would not be available in an emergency.”
China responded by blocking exports of the company’s finished products, alarming Europe’s auto industry.
According to Reuters, a spokesperson for the German Economy Ministry said the government was concerned about difficulties in the chip supply chain.
—CNBC’s Dylan Butts contributed to this report.
