Finance
VW production continuing for now but chip uncertainty high, source says
Published by Global Banking and Finance Review
Posted on October 23, 2025
2 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on October 23, 2025
2 min readLast updated: January 21, 2026
Volkswagen's production continues despite chip supply risks from the Nexperia dispute, with potential stoppages if the issue remains unresolved.
By Ilona Wissenbach and Rachel More
FRANKFURT (Reuters) -Production at Volkswagen's main plant will proceed as planned during its next work week, despite the risk of shortages from a stand-off between China and the Netherlands over chipmaker Nexperia, a person familiar with the matter said.
But beyond the next work week, which will be shortened anyway because of a German public holiday, there is some uncertainty, the source told Reuters on Thursday.
Although Volkswagen has no current plans to launch a state-backed reduced working hours scheme at its main Wolfsburg plant, the automaker is in precautionary talks with Germany's labour agency over using this option later, the source added.
Volkswagen declined to comment.
Europe's carmakers have sounded the alarm over possible stoppages if the dispute is not solved, with a Chinese ban on exports of Nexperia products hitting the supplier networks of companies like Volkswagen, BMW and Mercedes.
Beijing announced the restrictions after the Dutch government seized control of the company over intellectual property concerns linked to its Chinese owner Wingtech, which was placed on a U.S. government list last year flagging it as a possible national security risk.
Nexperia makes chips that are not considered sophisticated, but are needed in high volumes and are widely used in the automotive and consumer electronics industries.
Most Nexperia chips are manufactured in Europe but packaged in China and it is not clear how long stockpiles would last.
Industry sources say switching suppliers is possible, with Infineon, NXP and Texas Instruments named as possible alternatives, but this costs time due to necessary approval processes.
Volkswagen and Mercedes-Benz said on Thursday they were looking for alternative supplies to avoid a repeat of stoppages during the last semiconductor crisis in the COVID-19 pandemic.
On Wednesday, Volkswagen said it had informed workers that it could no longer rule out production stoppages.
A spokesperson for Porsche said production at the Volkswagen luxury subsidiary continued as normal.
(Editing by Thomas Escritt, Sabine Wollrab and Alexander Smith)
A semiconductor shortage occurs when the supply of semiconductors, essential components in electronics, is insufficient to meet demand, often impacting industries like automotive and consumer electronics.
Production stoppage refers to a halt in manufacturing activities, often due to supply chain disruptions, labor issues, or equipment failures, affecting a company's output and revenue.
Alternative supply refers to sourcing products or components from different suppliers to mitigate risks associated with supply chain disruptions and ensure continuity in production.
A public holiday is a day recognized by law as a day off for the general population, often commemorating significant events or cultural traditions, affecting business operations.
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