More delays to the national security probe into the acquisition of Newport Wafer Fab by a Chinese owned entity
The protracted acquisition of Newport Wafer Fab, continues with the news of another delay.
The whole issue began back in July 2021, when it was revealed that Newport Wafer Fab (NWF), the UK’s largest largest chip producer, would be acquired by Dutch chip firm Nexperia for just £63 million ($87 million).
However concerns immediately surfaced, centred over the fact that Nexperia is owned by a Chinese chip firm 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 UK government research contracts.
Indeed, at least one of contracts involves developing chip technology for a radar system that would be used in fighter jets.
As soon as the Nexperia acquisition was announced last year, national security concerns were immediately raised by Tom Tugendhat MP, leader of the UK government’s China Research Group and chairman of the Foreign Affairs Select Committee.
Tugendhat at the time voiced his concerns that the UK was selling a prized asset to a Chinese-owned company, when there was a global chip shortage.
National security review
Just a couple of days after that concern was voiced, former Prime Minister Boris Johnson ordered a review of the acquisition of Newport Wafer Fab.
Then in May this year, the government’s promised full national security review of the purchase finally began.
In July former business secretary, Kwasi Kwarteng delayed making a decision on the deal for another 45 days until 5 September.
Using the National Security and Investment Act, Kwasi Kwarteng had the option to either block the deal, demand remedies, or allow it to go ahead.
But the UK political landscape has now changed.
This week Kwasi Kwarteng has been appointed by new Prime Minister Liz Truss, as new Chancellor of the Exchequer.
Jacob Rees-Mogg meanwhile has been appointed Secretary of State for Business, Energy and Industrial Strategy.
And these changes means a decision has been delayed.
“The Secretary of State has agreed a voluntary period with Nexperia BV regarding their acquisition of Newport Wafer Fab, to consider whether to make a final order under the National Security and Investment Act and, if so, what provision a final order should contain,” a spokesperson at BEIS told The Register.
The spokesperson refused to provide a firm deadline on a decision, but a spokesperson for Nexperia BV told the Register that the UK government had “extended the Nexperia Newport review” that provides an extension until “3 October 2022.”
Meanwhile, it was reported last month that British chip executives are developing a rescue plan for Newport Wafer Fab.
The investment fund Headlight Technology Partners is reportedly in contact with the former chief executive of Imagination Technologies (Ron Black), who is said to be poised to launch a bid for the Welsh chipmaker.
Ron Black reportedly is prepared to step in and support Newport Wafer Fab if its sale to Nexperia falls through.
Black is understood to have £300 million of funding earmarked to buy and grow the factory.