Newport Wafer Fab: Government launches security review into Chinese takeover

Newport Wafer Fab

Business Secretary Kwasi Kwarteng is set to make a full security assessment into the takeover of Newport Wafer Fab by Chinese-owned company Nexperia.

Wales-based Newport Wafer fab is the UK’s largest chip plant. It agreed to the Nexperia takeover deal last year, however, the sale was blocked by the UK government over potential risks to national security.

Prime Minister Boris Johnson pledged a security investigation into the sale, but a report in April from frustrated MPs showed it had yet to begin.

A government minister responded to the report, confirming that the security review would take place.

Kwarteng announced yesterday that a “full assessment” of the acquisition will take place under the National Security and Investment Act.

Kwarteng’s review could force Dutch firm Nexperia’s shareholding of Newport Wafer Fab to be reduced back to the original 14% stake.

“We welcome overseas investment, but it must not threaten Britain’s national security,” Kwarteng said on Twitter.

The initial security concerns stem from Nexperia’s parent company Wingtech, which has been reported to have strong ties to the Chinese government.

The prime minister said last year that while a security review would be approved, he did not want to discourage investment into the UK from China over “anti-China spirit”.

Cross-bench peer Lord Alton in particular expressed concerns that the sale would make the government “customers of the People’s Republic of China”.

Alton added: “It is about national resilience, and it is about whether or not we wish to become a wholly-owned subsidiary of the People’s Republic of China.”

The government has 30 working days to carry out its national security assessment.

The sale of Britain’s largest semiconductor manufacturer has been under particular scrutiny amid the global chip shortage.

Semiconductors have become essential to the manufacturing of a huge amount of electronics from video game consoles to military systems.