Inquiry into Newport Wafer Fab takeover

1 min read

The UK government has announced an inquiry into the proposed takeover of the UK’s largest microchip manufacturer Newport Wafer Fab by Chinese-backed Nexperia.

According to the business secretary Kwasi Kwarteng, the deal will be scrutinised under the new National Security and Investment Act, which was introduced earlier this year.

This is likely to prove a tricky as the Fab, which is located in south Wales, has a number of contracts with the UK government, many of which are defence related.

Nexperia, which is based in the Netherlands but is a subsidiary of China’s partially state-backed Wingtech, has offered over £60m for the facility, but while the UK government has said that it welcomes overseas investment concerns have been raised about the possible impact on Britain’s national security.

Kwarteng now has 30 working days to make a decision, although there is an option to extend the time for a further 45 working days. He can then block the deal, demand changes to the deal or allow it to go ahead.

This deal has been attacked by MPs including Tom Tugendhat, the chair of the foreign affairs committee, who believe that the purchase would give China access to cutting-edge British semiconductor designs.

On the other side of the argument Nexperia could bring significant fresh investment to the company.

We have just under a month to see which argument wins out!