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Multi-Million-Pound Refinancing Deal for Newport Wafer Fab

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Newport Wafer Fab (NWF), the UK’s leading 200mm silicon chip semiconductor processing facility, has completed a multi-million pound refinancing deal, involving a restructure of existing Welsh Government loans and a new asset finance facility from HSBC UK.

The finance deal includes the early settlement of deferred consideration, the purchase of specialist, back end of line equipment to broaden the foundry’s manufacturing capabilities and a £3 million contribution to a new Combined Heat and Power (CHP) plant designed to reduce utility costs by over £1.5m per annum.

NWF is a critical component of CS Connected, the world’s first compound semiconductor cluster.  CS Connected, which is supported by investment from the Welsh and UK governments and the Cardiff Capital Region, brings together compound semiconductor material expertise and large-scale semiconductor wafer scale volume manufacturing, combined with world-class academic research to deliver bespoke solutions to its customer using advanced compound semiconductor materials.

NWF provides volume manufacturing services for the cluster and any customers who have developed their own products using silicon and compound on silicon semiconductors. It is pivotal to a number of significant international projects being scrutinised by world leading companies attracted to the one-stop-shop capability of CS Connected.

CS Connected is one of 24 shortlisted projects, and the only one based wholly based in Wales, to receive early-stage funding from UK Research and Innovation’s (UKRI) Strength in Places Fund to develop a full-stage business case submission.  The Strength in Places Fund will benefit all regions of the UK by enabling them to tap into world-class research and innovation capability spread right across the country, leading to significant economic impact, high-value job creation and regional growth.

Dr Paul James, CEO of NWF, expressed his gratitude to the involved parties for their continuing support that has strengthened the position of NWF and the wider CS Cluster.

Minister for Economy and Transport Ken Skates said:

“Wales’ semiconductor cluster produces cutting edge technology which contributes to many of the items that are so prevalent in modern everyday life.

“The Welsh Government has invested significantly in establishing Wales as a global centre for advanced compound semiconductor technologies and we were pleased to provide support for Newport Wafer Fab so that they can continue work to attract further commercial investment.

“The cluster and its skilled workforce is hugely important to our economy and with world leading companies and technologies operating and thriving in the region, I look forward to its continued success and growth in the years ahead.”

Warren Lewis, Head of Corporate Banking in South Wales at HSBC UK added:

“We are delighted to be supporting a business in growth and one which is helping retain a number of jobs in South Wales. The funding from HSBC UK is helping NWF grow its customer base both domestically and internationally and as a result is on the path to becoming the largest semiconductor foundry in Europe. We look forward to continuing our support over the coming years.”

Cllr Andrew Morgan, Leader of Rhondda Cynon Taf County Borough Council, and Chair of the Cardiff Capital Region Regional Cabinet, said:

“The Cardiff Capital Region is committed to creating a complete compound semiconductor eco-system in South-East Wales to take advantage of the growing prominence of compound semiconductor technologies.

“We are supporting the establishment of the world’s first compound semiconductor cluster. In turn, this can place this region at the heart of a sector which is developing technology which is playing an increasingly vital role in the way we live.”

Cllr Debbie Wilcox, Leader of Newport City Council, and a member of the Cardiff Capital Region Regional Cabinet, said:

“To achieve our aspiration to create the world’s first compound semiconductor cluster a robust and sustainable supply chain is critical. This investment will enable support this, and in the process deliver the economic and social benefits we aspire to achieve for our local communities here in South-East Wales.”

NWF was acquired by private investors in September 2017 from German multinational Infineon Technologies AG, a world leader in semiconductor solutions which produces a wide range of semiconductors, microcontrollers, LED drivers, sensors and automotive and power management integrated circuits.  Infineon has been and remains a key customer for Newport Wafer Fab.

NWF was advised on this latest deal by Gambit Corporate Finance and Acuity Law which both led the original acquisition in 2017.