Europe’s auto industry is preparing for production disruption within days because of China’s export restrictions on semiconductors made by Nexperia.

Chip shortages are likely to hit key suppliers within a week, while the impact could spread across the entire sector within 10 to 20 days, according to people familiar with the matter, who asked not to be identified as the discussions are private.

“The situation could lead to significant production restrictions, possibly even production stoppages in the near future,” Hildegard Müller, who heads Germany’s VDA auto lobby, said in a statement.

Beijing has blocked Nexperia — a Dutch chipmaker owned by China’s Wingtech Technology Co. — from exporting products made at its Chinese plants. The move came after the Dutch government seized control of the company under emergency laws meant to safeguard strategic production.

The step has escalated a broader trade dispute, as China and the U.S. prepare for high-level talks later this month. It follows Beijing’s earlier measures to tighten exports of rare earths and battery materials critical to electric vehicles.

Carmakers and their suppliers are holding crisis meetings with government officials to map out contingency plans, but have warned that sourcing and qualifying replacement components will take months, not days.

The fallout is expected to extend beyond Europe, with U.S. automakers also exposed through smaller parts and electronics makers that rely on Nexperia chips, the people said. The industry was blindsided by the Dutch government’s move to take control of Nexperia after pressure from Washington, two of the people said.

German chipmaker Infineon Technologies AG, one of the main suppliers to the auto industry, has been fielding inquiries from manufacturers seeking alternative sources of components, Bloomberg reported last week.

While initially caught off guard, automakers and suppliers have now opened channels with Chinese authorities as well as officials in the Netherlands and the European Commission, according to people familiar with the talks. The outreach aims to clarify the scope of the export controls, and explore ways to ease the impact before production lines are forced to stop.

Volkswagen AG has set up a task force to assess potential exposure in its supply chain. Robert Bosch GmbH, the world’s largest auto-parts maker, said its expert teams are in close contact with Nexperia as well as other suppliers and affected customers to avoid or minimize any production restrictions.

“Like other Nexperia customers, we are facing major challenges due to the current situation,” a Bosch spokesperson said October 21. “We therefore hope for a swift resolution among the parties involved that will help ease the current supply bottleneck.”

A spokesperson for Mercedes-Benz Group AG said the company is monitoring developments with stakeholders, adding that the automaker has secured short-term chip supplies but that the situation remains volatile and difficult to predict.

“We are working intensively with our partners to avoid potential supply gaps,” the spokesperson said via email.