The UK Government had delayed a decision on whether to block the takeover of the UK’s biggest microchip maker by a Chinese-owned company on national security grounds.
Business Secretary Kwasi Kwarteng, having announced a review of the acquisition of Newport Wafer Fab (NWF) last month under the National Security and Investment Act, has extended the process by further 45 working after the initial 30 day assessment period expired on Tuesday.
The plant, based in Newport, was acquired 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 £63m 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.
Nexperia said it has already provided a further £180m (£80m each) in its Newport plant - which has been rebranded Nexperia Newport) and a sister operation in Manchester.
The review of the deal is being undertaken by the Investment Security Unit (ISU) in Mr Kwarteng’s Department for Business, Energy and Industrial Strategy. Mr Kwarteng will make the ultimate decision.
Toni Versluijs, Nexperia’s UK general manager, said: “As anticipated, the ISU informed us on July 6th that it needs more time to complete its review of Nexperia’s acquisition of the Newport site. We look forward to cooperating further with the ISU and BEIS to bring about a swift resolution of this case that benefits the UK semiconductor industry, its customers and Nexperia.
“Our contribution to the UK economy is paramount. We have been operating here for over 50 years and employ over 1,500 people, recently investing £160m in our Newport and Manchester production sites to expand our UK activities. Our objective is to help meet the growing global semiconductor demand to ensure that our customers such as Jaguar Land Rover can operate without interruption. We continue to work locally in Newport and Manchester to expand skills in STEM, invest in education and secure the future of our employees. We look forward to a positive outcome from the ISU assessment as soon as possible, both for the UK and Nexperia.”
The acquisition of NWF has been criticised on national security grounds by a number of senior politicians and industry figures, including Tory MP and potential new party leader candidate Tom Tugendhat, and former head of the National Cyber Security Centre, Ciaran Martin.
Nexperia said it is committed to continuing to contribute to strengthening the UK semiconductor industry.
It recently said: "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.
Speaking recently the Welsh Government’s Business Minister, Vaughan Gething, called on the UK Government to swiftly make a decision.
Asked if he would be relaxed if a key player in the compound semiconductor cluster for South Wales remained in Chinese ownership, Mr Gething 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."
