Nexperia denies approval received for Newport Wafer Fab takeover

1 min read

Reports that the UK government has decided not to intervene in the takeover of Newport Wafer Fab by Nexperia have been denied by the UK government.

The UK government said it was, "considering the case and no decisions have been made" while Nexperia said it was unaware of such a decision.

Nexperia, which is owned by Wingtech, took a 15% stake in Newport Wafer Fab back in 2019 and got the right to trigger a 100% buy-out option of Newport Wafer Fab and to put two directors on the Newport Wafer Fab board if it fell into financial difficulties.

That proved the case last year when Newport Wafer Fab needed funds so that it could increase capacity to meet semiconductor orders placed by Wingtech.

As a consequence of these supply issues, Nexperia decided to exercise its right to buy 100% of Newport Wafer Fab in a deal that valued it at £63 million and also involved settling a £17 million loan that was owed by the Newport Wafer Fab to the Welsh government.

Due to concerns over firms with links to China the UK government referred the issue to the National Security Adviser who decided that there were not enough security concerns to block the deal, but while sources have claimed that the deal has been quietly approved it now appears that the business secretary, Kwasi Kwarteng can, and still might, intervene in blocking it and it appears that a number of cabinet ministers are urging him to block the deal.

Chairman of the Foreign Affairs Committee, Tom Tugendhat has criticised the proposed deal for the UK's largest microchip factory arguing that, “It’s not clear why we haven’t used our new powers under the National Security and Investment Act to fully review the takeover of one of our leading compound semiconductor companies. This is an area where China is sinking billions to compete. The government has no clear strategy to protect what’s left of our semiconductor industry.”