The U.K. government has blocked the takeover of Britain's largest microchip plant in Newport, by a Chinese-owned company over concerns it may undermine national security.
Grant Shapps, minister for business, energy and industrial strategy, yesterday ordered Dutch chipmaker Nexperia to sell its stake in Newport Wafer Fab, the Welsh semiconductor firm it acquired for £63 million in July 2021.
Nexperia is based in the Netherlands but owned by Wingtech, a partially Chinese state-backed company listed in Shanghai. Nexperia had initially owned 14% of Newport Wafer Fab, but in 2021 it upped its stake to 100%.
The acquisition of the Newport Wafer Fab factory had been investigated by government over national security concerns. The investigation took place under the new National Security and Investment Act, which grants power to the government to retrospectively intervene in a deal.
The factory has for decades been a critical site, producing tiny silicon chips. Currently there is a global shortage of the semiconductors that go in cars and everyday electronics, which has been exacerbated by the pandemic and severely hit a wide range of industries.
At the time of the takeover, the Newport plant was producing about 35,000 wafers a year.
In its decision, the UK government said the takeover of Newport Wafer Fab created two risks to national security.
The first related to Nexperia's development of the Newport site, which the government said could “undermine UK capabilities” in producing compound semiconductors.
The second, the plant's location as part of a semiconductor cluster on the Duffryn industrial estate, could “facilitate access to technological expertise and know-how”.
The firm said it was “shocked” and would appeal against the decision.
