The Dutch economy minister failed to resolve a standoff over chipmaker Nexperia BV with China, causing concerns for Germany’s car industry facing potential production shortages. The Dutch government took control of Nexperia last month due to fears of technology theft by its Chinese owner, Wingtech, prompting China to halt exports of the company’s products.

Dutch Economy Minister Vincent Karremans and Chinese Commerce Minister Wang Wentao discussed steps towards a solution, but China expressed opposition to broadening the concept of “national security.” China urged the Netherlands to consider global industry and supply chain stability amidst the Nexperia dispute, which has disrupted operations and supply chains.

Nexperia’s business in China is asserting independence, advising employees to reject external instructions. The chipmaker produces essential but not sophisticated chips used in automotive and consumer electronics industries. With manufacturing in Europe but packaging in China, finding alternative partners quickly is challenging, raising concerns about stockpile depletion.

Germany’s auto industry association warned of potential production restrictions and stoppages if the Nexperia chip supply interruption persists. The global trade tensions, including import tariffs and export curbs, are already impacting European carmakers and suppliers. The dispute exacerbates the challenges faced by the industry, calling for quick and pragmatic solutions to avoid disruptions.

Read more at Yahoo Finance: Dutch seek solution to stand-off with China over chipmaker Nexperia, while carmakers fret