Woflspeed is putting plans to build a semiconductor factory in Germany on hold, according to officials and reports in German media.

The Durham-based company announced the project in 2023. It partnered with German auto parts maker ZF to construct the plant in the western state of Saarland, close to Germany’s border with Luxembourg and France.

“Here on this site of a former coal burning power plant, and a reminder of our industrial past, we want to build a bridge; a bridge to a better and cleaner industrial future,” Wolfspeed CEO Gregg Lowe said at the announcement.

The plant was to make chips for electric vehicles, which is a growing segment of Wolfspeed’s business around the world. But on Tuesday, media reports emerged that ZF would cancel its stake in the $3 billion project. ZF insisted it pulled out after Wolfspeed told company officials the plant was on hold.

“Wolfspeed is responsible for the project. ZF has always provided intensive and active support,” a ZF spokesperson said in a statement to Reuters.

As of Wednesday morning, Wolfspeed has not responded to WUNC’s request for comments about the future of the Saarland plant. Saarland’s premier, Anke Rehlinger, confirmed the company decision.

“The company has made it clear to us that they are still committed to the Ensdorf location. However, given the market situation, Wolfspeed is postponing the investment to an unspecified date,” Rehlinger said at a press conference and reported by public broadcaster Saarland Rundfunk.

The news comes two weeks after the Biden Administration approved Wolfspeed’s application for a $750 million dollar grant for a semiconductor plant under construction in Siler City. The money comes from the CHIPS Act, a federal law that’s meant to encourage domestic semiconductor production. But the industry is facing global headwinds due to a drop in demand for computer chips.