Chinese-owned Nexperia has acquired Welsh semiconductor manufacturer Newport Wafer Fab (NWF), with one MP asking the government to explain why it is “turning a blind eye” to the acquisition.
Through the acquisition, Wingtech’s Nexperia obtains 100% ownership of the semiconductor production facility and will rename NWF to Nexperia Newport. The company stated that Nexperia Newport will “continue to have a strong position in the Welsh ecosystem and technology development and will secure the current jobs at the Newport site and others across the region”.
Nexperia was previously a customer of the foundry services offered by NWF and became its second-largest shareholder in 2019. The Newport site adds to Nexperia’s other European manufacturing operations in Manchester and Hamburg.
MP Tom Tugendhat told IT Pro he was surprised that the deal had been completed without undergoing a review under the National Security and Investment Act, a piece of legislation introduced in April.
“The semiconductor industry sector falls under the scope of the legislation, the very purpose of which is to protect the nation’s technology companies from foreign takeovers when there is a material risk to economic and national security,” he said.
“When the UK signed the Carbis Bay G7 communique, we pledged to take steps to build economic resilience in critical global supply chains, such as semiconductors. This appears to be an immediate and very public reversal of that commitment.
“This is the first real test of the new legislation since its introduction in April,” he added. “The government is yet to explain why we are turning a blind eye to Britain's largest semiconductor foundry falling into the hands of an entity from a country that has a track record of using technology to create geopolitical leverage."
A government spokesperson from the Department for Business, Energy and Industrial Strategy told IT Pro it was aware of the takeover but does not "consider it appropriate to intervene at this time, we will continue to monitor the situation closely and will not hesitate to use our powers under the Enterprise Act should the situation change".
“We remain committed to the semi-conductor sector, and the vital role it plays in the UK’s economy," added the spokesperson.
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The Newport semiconductor site was first established in 1982. It currently produces over 35,000 200nm wafer starts per month covering a range of semiconductor technologies ranging from MOSFETs and Trench IGBTs using wafer thinning methods to CMOS, analogue and compound semiconductors.
The plan for the plant is to support Nexperia’s $10 billion growth ambition and add to its product lines in IGBT, Analog and compound semiconductors in parallel to the current 8” investments at the Manchester and Hamburg wafer fabs.
“The acquisition is great news for the staff here in Newport and the wider business community in the region as Nexperia is providing much-needed investment and stability for the future,” said Paul James, managing director at the Newport site,
“We are looking forward to becoming part of the global Nexperia team and are keen to keep the current workforce. Additional local resources may be required too. We are also pleased that we will be able [to] continue to contribute to the local ecosystem.”
In April, the government decided to intervene in the proposed takeover of Arm by Nvidia, citing national security grounds. The government had been under pressure to block the takeover following industry-wide calls for it to intervene. Shadow business secretary Ed Miliband had called for legal assurance the company wouldn’t be moved out of the UK.
The acquisition of NWF comes during a global chip shortage where many nations are trying to attract chip manufacturers to their territories in a bid to increase domestic productions of these essential components.
Yesterday, it was reported that Japan’s Sumitomo Electric was going to open a factory in the US to produce 5G semiconductors for the US and European markets. Taiwan’s TSMC is also reportedly opening six new factories in Arizona, at a time where the US is thinking of spending $52 billion on boosting domestic semiconductor manufacturing.
Japan is also trying to lure semiconductor makers with financial incentives as it moves to secure future chip supplies amid the global shortage. The country announced in June it would help fund a $338 million TSMC chip development project.
