The government has been criticised by Labour opposition over its delay in approving the acquisition of Welsh semiconductor company Newport Wafer Fab.
A deal from US chipmaker Vishay to acquire the Newport-based firm for £144m was agreed by the two companies late last year. It came after the government blocked the previous agreement from Chinese-owned Nexperia to acquire the company on national security grounds.
In a letter – seen by UKTN – to the Secretary of State for Wales, David TC Davies, Labour’s counterpart Jo Stevens accused the government of “dragging its feet” in the approval process.
Stevens said the “dither and delay” from the government put Newport Wafer Fab’s employees in a “damaging limbo which could cost further investment and jobs”.
Stevens added: “Financial planning for the takeover is a 30-day process that must begin at the beginning of the month.”
She said that Newport Wafer Fab workers she met with were “promised” by Davies before Christmas that he he would raise the issue with cabinet colleagues but “they heard no more”.
A source close to Vishay confirmed to UKTN that the company remains committed to the acquisition.
Vishay and Newport Wafer Fab agreed on the takeover last November, a year after the government blocked the acquisition of the Welsh chip plant over national security concerns.
Dutch microchip company Nexperia had previously agreed on a £63m deal to acquire Newport Wafer Fab. However, the government intervened via the National Security and Investment Act, which provides powers to block takeovers if they are deemed to present a risk to national security.
After a review process of around 16 months, the government concluded that the deal would not go ahead, due to concerns over Wingtech’s – Nexperia’s parent company – ties to the Chinese state.
A UK government spokesperson said: “We are committed to ensuring that the UK semiconductor industry continues to grow and thrive across the UK, including in South Wales.
“Our ambitious semiconductor strategy, which was published earlier this year, is providing investment of up to £1bn in the sector over the next decade.”
The letter was first reported by The Guardian.