UK ministers blocked the sale of Newport Wafer Fab to Nexperia

The UK government has chosen to block the sale of Newport Wafer Fab to Chinese-owned Nexperia on national security grounds after months of controversy that left Britain’s biggest chipmaker in limbo.

Nexperia, which is owned by China’s Wingtech Technology, will have to liquidate 86 percent of the company, leaving it with the 14 percent stake it held before launching a takeover in 2021, according to a final order issued by the government on Wednesday.

Kwasi Quarting, then business secretary, announced in May that he was “advocating” a takeover of Newport under the National Security and Investment Act, new powers under which the government can restrict or not deal with transactions involving strategic national assets.

Nexperia, which became Newport Wafer Fab’s second-largest shareholder in 2019, launched a takeover of the chipmaker two years later, when the Welsh company was struggling to pay down its debts and faced possible bankruptcy. Since then, the factory has sold its wares exclusively to Nexperia, prompting fears of technology transfer from the UK to China.

“We are shocked by the decision. The staff are shocked, too,” said Tony Versluijs, head of Nexperia UK. “We will keep fighting. we believe [the decision] It is fundamentally wrong. We will appeal it. We are bent on turning him over.”

The British chip maker has become a cornerstone in the global battle over chips, some of the most complex and critical components of all modern technology. As countries around the world seek to boost domestic supply chains for chips, the sale of one of Britain’s only strategic semiconductor assets to a Chinese company has faced a backlash from British politicians, industry executives and foreign powers.

A decision on whether to cancel the deal has been delayed several times since May, as the government has gone through three administrations.

“None of the three foreign ministers in the last three months have been willing to talk to us, and then the decision comes from the ivory tower,” Versluig said. We have provided far-reaching remedies for security risks. This does not raise the bar, it brings down.”

The government determined that there was a national security risk arising from a “potential reintroduction of composite semiconductor activities to the Newport site”, referring to the fact that Nexperia is in the midst of a cluster of high-tech semiconductors in that part of Wales to which China has access.

Nexperia disputed these reasons, saying it had addressed the government’s concerns by offering remedies that precluded any future semiconductor development or activity at the Newport Wafer site.

The decision also found that the site could facilitate Nexperia’s “access to technology expertise” that could prevent other chipmakers in the group from “participating in future national security-related projects”.

In September, the Financial Times reported that the former owner of the semiconductor manufacturer, Drew Nelson, was looking to buy back the company, which employs about 450 people in the Welsh city of Newport.

Nilsson owned Newport Wafer Fab until 2021 and oversaw its sale to Netherlands-based Nexperia for £63m. He teamed up with private equity group Palladian Investment Partners to bid for the company, according to two people briefed on the matter.

People said that under the terms of the 2021 sale, Nelson was offered first refusal to buy back the company if its assets were made available again.

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *