The two year national security saga surrounding the UK’s largest chip-making facility, Newport Wafer Fab (NWF), looks to have been resolved.

This week it emerged that US-based chip firm Vishay Intertechnology has agreed to buy Newport Wafer Fab for $177 million.

The saga about Newport Wafer Fab (NWF) began back in July 2021, when the UK government intervened when it emerged that NWF was being acquired by chip firm Nexperia, based in the Netherlands, for just £63 million ($87 million).

Image credit: Sergei Starostin/Pexels

National security

But national security concerns immediately surfaced over the fact that Nexperia itself was owned by a Chinese chip firm called Wingtech Technology.

Newport Wafer Fab is based in Newport, Wales, and it is a high volume 200mm wafer fab that makes silicon chips used in power supply applications for the car industry.

The fab has also been developing more advanced “compound semiconductors,” which are faster and more energy efficient.

NWF also makes the wafers that electronic circuits are printed onto, and it manufactures some 32,000 wafers a month.

Some of its work is also potentially sensitive as Newport Wafer Fab has over a dozen research contracts with the UK government.

Indeed, at least one of contracts involves developing chip technology for a radar system that would be used in fighter jets.

National security review

Former Prime Minister Boris Johnson ordered a review of the acquisition of Newport Wafer Fab, and in May 2022, the government’s full national security review of the purchase began in earnest.

In July 2022 former business secretary, Kwasi Kwarteng delayed making a decision on the deal for another 45 days until 5 September, leaving the future of the firm in limbo.

A government decision about the deal was repeatedly delayed for months, until November 2022, when the UK government issued its ‘final order’ and blocked the deal on national security grounds.

Nexperia was ordered to sell at least 86 percent of NWF.

Fast forward a year and in September 2023 NWF proposed a “restructuring plan” that would reduce the workforce by approximately 100 staffers.

The plant was said to have employed around 500 people.

Vishay purchase

Now it has emerged that Pennsylvania-based Vishay Intertechnology is in the process of acquiring Newport Wafer Fab.

Vishay has a market capitalisation of $3.2bn and sells semiconductors and electronic parts, said it aimed to spend $1.2bn to increase its global footprint over the next three years.

It said the deal “will bolster the semiconductor industry in South Wales, securing and increasing the number of well-paid, skilled jobs at Newport Wafer Fab, working closely with the local community.”

However the NWF job cuts have already gone ahead, and headcount at the plant has reportedly been reduced to around 350.

“While Newport Wafer Fab has had several owners in recent years, we are committed to the long term, and want to bring stability,” Vishay said. “As a company with sixty years’ experience in manufacturing, we believe the workforce in Newport have the skills and commitment to ensure a bright future for the Fab.”

Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

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