UK Approves Chinese Takeover of Newport Wafer Fab

Article By : John Walko

The UK government had approved the sale of the Newport Wafer Fab to a Dutch subsidiary of Chinese group Wingtech, despite a long-running review of the national security interests involved in the proposed deal said to be worth about €75 million.

A huge political row has broken out in the U.K. about the ongoing plans to sell Newport Wafer Fab, one of the very few plants left in the country still making semiconductors, to a Dutch subsidiary of Chinese group Wingtech.

Newport Wafer Fab
Newport Wafer Fab (Image source: Nexperia)

It has emerged that the government had approved the sale, despite a long-running review of the national security interests involved in the proposed deal, said to be worth about £63 million (about €75 million).

Back in July 2021, the U.K. government had instructed the National Security Adviser, Sir Stephen Lovegrove, to review the deal. It has emerged this week that Sir Lovegrove had concluded there were not sufficient security concerns to block the deal.

But many in the government and the opposition Labour party have suggested the review had used too narrow a definition of ‘national security’.

Perhaps the strongest criticism came from Ton Tugenhadt, chairman of the House of Commons foreign affairs committee, who suggested: “It is not clear why we have not used our new powers under the National Security and Investment Act, to review the takeover of one our leading compound semiconductor plants.” The Act came into force this January and could have allowed a different outcome.

Tugenhadt noted that so few details had been provided to the committee he chairs, that he doubted a review had even taken place.

He added: “This is an area where China is sinking billions to compete. The government has no clear strategy to protect what is left of our semiconductor industry.”

And a former U.K. Prime Minister, Iain Duncan-Smith, chimed in, warning that “if the government goes down this road, it will become yet another step in the pathetic process in appeasing China who right now is supporting Russia and plans to propose a direct threat to the West’s access to microchips and other key components for electronic equipment.”

From the other side of the political spectrum, Mike Clancy, general secretary of Prospect, the science and civil service union, said: “This represents a further blow to British leadership in this critical high-tech industry. If the government is serious about building a high-productivity, high-wage economy, we need a new strategy to protect and expand the U.K.’s long-term capability in the semiconductor industry.”

Nexperia is an Amsterdam, Holland-based subsidiary of Wingtech —formerly owned by NXP Semiconductors— widely believed to be backed by the Chinese Communist Party. It bought the Welsh semis group last spring, and there were immediate calls for a review of the deal, which has been prolonged to the present time. The purchase was sweetened by a £17 million (€20 million) repayment of a loan owed to the Welsh government.

Nexperia was a key customer of devices from the Newport plant.

The plant currently employs about 450 people. It was originally set up in 1982 by Inmos, a government backed venture and pioneer in U.K. semis manufacturing that initially made its own ICs but subsequently turned into a foundry with a 200mm fab and a current capacity of some 3200, 0.18 micrometre wafer starts a month. For a while, it was owned by Thorn-EMI, but then acquired by STMicroelectronics, which closed the plant in 1983.

This article was originally published on EE Times Europe.

Subscribe to Newsletter

Leave a comment