The government has decided not to intervene in the takeover of Newport Wafer Fab by quietly approving the controversial sale of a Welsh microchip factory to a Chinese-owned firm.

Nexperia, the Amsterdam-headquartered spin-off from NXP owned by Wingtech of Shanghai, took a 15% share in Newport Wafer Fab in 2019. Nexperia was a customer of Newport Wafer Fab.

Nexperia got the right to trigger a 100% buy-out option of Newport Wafer Fab and to put two directors on the Newport Wafer Fab board if it fell into financial difficulties.

In 2021 Newport Wafer Fab needed funds to increase capacity to meet semiconductor orders placed by Wingtech.

Following contract supply issues Nexperia exercised its right to buy 100% of Newport Wafer Fab for £63 million and paying off a £17 million loan owed by Newport Wafer Fab to the Welsh government.

The government had referred the issue to the National Security Adviser who decided that there were not enough security concerns to block the deal.

“It’s not clear why we haven’t used our new powers under the National Security and Investment Act to fully review the takeover of one of our leading compound semiconductor companies,” said Tom Tugendhat, chairman of the House Of Commons standing committee, “this is an area where China is sinking billions to compete. The government has no clear strategy to protect what’s left of our semiconductor industry.”

By: DocMemory
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