UK Approves Newport Wafer Fab Sale To US Vishay Intertechnology

Government approves sale of UK’s largest chip-making facility to US firm, after blocking sale to Chinese owned entity

The uncertainty surrounding Newport Wafer Fab (NWF) looks to have been resolved, after a nearly three year acquisition saga that involved the UK government and national security concerns.

It has been reported that the UK government has approved the sale of NWF to US-based chip firm Vishay Intertechnology, which in November 2023 had announced it would buy Newport Wafer Fab for $177 million.

It brings to an end an acquisition saga that had begun back in July 2021, when the UK government intervened when it emerged that NWF was being acquired by chip firm Netherlands-based Nexperia for just £63 million ($87 million).

Parliament Government London © anshar Shutterstock 2012

National security review

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

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 NWF 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, before the headcount reduction.

Vishay approval

Then in November 2023 Pennsylvania-based Vishay Intertechnology announced it was in the process of acquiring Newport Wafer Fab.

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

It said at the time that the NWF 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.”

Now various media outlets have reported that Deputy Prime Minister Oliver Dowden has signed a consent order approving the purchase by the American firm.

Under the terms of the agreement, the UK government must be informed if Vishay plans to give third parties access to the factory via sale, transfer, or lease agreements.

UK chip fab

Newport Wafer Fab is based in Newport, Wales on a 28 acre site, and it is a wafer fab that produces simple, but accurate, electronic switches (semiconductor wafers) that can be found in everyday devices from kettles and hairdryers to smartphone chargers and cars.

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

NWF manufactures some 32,000 wafers a month.