The Dutch government this month took control of Nexperia, owned by Chinese company Wingtech. The move prompted Beijing to block Nexperia products from leaving China.

The company produces large volumes of semiconductors in the Netherlands that are widely used in autos and consumer electronics.

Some 70% of the Netherlands-produced chips are packaged in China and sold mostly to distributors.

Reuters reported yesterday that Nexperia suspended supplies of wafers to its Chinese assembly plant, according to a letter addressed to its customers, which could exacerbate the supply squeeze.

Court filings showed that the seizure by the Dutch government came as US pressure was rising on Nexperia after Wingtech was placed on a restricted-export list, though Dutch authorities say governance shortcomings were the trigger.

The White House did not immediately respond to a request for comment.

It is expected to release a fact sheet later on Friday offering more details on its Chinese trade agreement.

Industry bodies have sounded the alarm over the possible impact on production.

On Thursday, Stellantis, which makes Jeep SUVs, said it had set up a “war room” to monitor the situation.

Japanese automaker Nissan said it had enough chips at the moment to last until the first week of November without disruption.