(MENAFN) Volkswagen, Germany’s largest automaker, may face temporary production halts at key plants due to a semiconductor shortage triggered by the Dutch government’s seizure of a Chinese-owned chipmaker, according to reports citing company sources.

The Netherlands took control of Nexperia’s Nijmegen factory late last month over intellectual property and security concerns. Nexperia’s parent company, Wingtech, was blacklisted by the US in 2024 amid ongoing trade tensions with China. In response, Beijing restricted the export of Nexperia chips from China, which are critical for Volkswagen’s electronic control systems.

Bild reported that Wolfsburg’s production line could be the first affected, starting with Golf models, and other plants in Emden, Hanover, and Zwickau may also face stoppages if the shortage persists. Volkswagen has reportedly discussed a state-backed reduced working hours plan to mitigate the impact on its workforce.

While a Volkswagen Zwickau plant spokesperson called the report “incorrect,” an internal letter acknowledged that a “short-term production impact cannot be ruled out” due to the chip shortage. The crisis may also affect other German automakers, with BMW and Mercedes reportedly monitoring the situation. The industry is already strained by high energy costs linked to EU sanctions on Russia and US tariffs.

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