The ownership fate of one of Wales’ leading technology firms and the biggest producer of microchips in the UK needs to be concluded swiftly to give investor confidence in the wider compound semiconductor cluster in the Cardiff Capital Region, says Economy Minister Vaughan Gething.
Newport Wafer Fab was acquired by Amsterdam-based Nexperia, whose ultimate owners is Chinese firm and Shanghai-listed Wingtech Technology, last year.
Nexperia, having been previously held a minority shareholding in the Newport-based facility which employs 500, was able to take total ownership having evoked a clause in the event of the facility being unable to meet customer orders.
It acquired the facility in a £65m deal from previous owner and indigenous firm Neptune Six – which itself had acquired the fab in a management buyout buy-in deal from German tech firm Infineon in 2018 which was backed by the Welsh Government.
There had been repeated calls following the acquisition for the UK Government to block the deal on national security grounds. And last month UK Government Business Minister Kwasi Kwarteng confirmed that the acquisition would now be considered under the recently introduced National Security and Investment Act. The review is expected to be concluded next month.
Mr Gething was asked if he would be relaxed if a key player in the compound semiconductor cluster for South Wales remained in Chinese ownership.
He responded: “Rather than the question from a pejorative point of view I think the important factor is that there needs to be certainty. The UK Government has had a long time to investigate the national security aspects of this. What needs to happen is that a choice is made so there is certainty not just for this business, but the wider cluster as people do rely on each other in the cluster.
" I am not privy to all of the national security considerations that the UK Government are considering, but I do hope that we can swiftly reach a resolution as this compound semiconducter cluster is important not just for Wales, but in UK terms as well. And I want to see a strategy (from UK Government) for the future as this is an area that I expect will grow in importance and value.
“These are good jobs and we will see more of them come to Wales and we stand ready to support business, and we have in the past.. but we need certainty and an actual decision to be made by the UK Government rather than kicking the can down the road.”
Nexperia has written to Westminster’s Business, Energy and Industrial Strategy Committee, outlining its commitment to improving the UK’s semiconducter sector. It said over the last 15 months it has invested £80m at its Newport facility – which has been rebranded Nexperia Newport – with the same amount at its other UK fab in Stockport, Manchester.
It said: “Nexperia is committed to continuing to contribute to strengthening the UK semiconductor industry. We have a long history in the UK with a deep knowledge of how the semiconductor industry works here and across the world. We value the semiconductor and tech clusters in South Wales and the north west. The additional £160m that Nexperia has decided to invest in the UK has made strides towards increasing the UK and global capacity of semiconductors for our valued customers.
Nexperia is a company that has customers who rely on our operations in the UK. We take our commitment to our customers seriously, including when there are global semiconductor supply issues. Any interruptions to the semiconductor industry can have serious ramifications for the supply chain, end consumers, and lead to price inflation.
By investing in the UK, Nexperia has helped to secure the long-term health of the semiconductor industry here. We are proud to have a century-long heritage (it acquired Mullard in 1927 and built out its Manchester fab in 1970) in the UK and to have relationships that allow us to secure the future of the industry. Training and investing in education is important to protect the future supply chain of the semiconductor industry.”
