Nexperia, owned by China's Wingtech Technology, which became the Newport Wafer Fab’s second-biggest shareholder in 2019, launched a takeover of the chipmaker in 2021 when the Welsh company was struggling to pay its debts. This move fuelled speculation of a wider tech migration from the UK to China in an atmosphere of heightened security fears first raised over Huawei by the US.
In the wake of the Chip Supply crisis and the rising tensions between China and the US, Western governments have been looking to bolster and protect their semiconductor production and supply chains so they're not at the mercy of external forces. In July, the US passed the Chips and Science Act that earmarked $52bn in grants to support advanced chipmaking. The EU has its own proposal for a €43bn Chips Act and France has announced it will separately invest billions in a new semiconductor plant being built by STMicroelectronics and US group GlobalFoundries.
The UK had thus far not taken equivalent action, but former business secretary, Kwasi Kwarteng, did announce in May that he was "reviewing” the acquisition of the Newport facility under the National Security and Investment Act - new legislation that enables the government to limit or block foreign transactions involving strategic national assets.
Now new business secretary Jacob Rees Mogg is calling for Nexperia to dramatically reduce its ownership of the company, with his final decision due by October 3rd this year.
Former chief executive of UK semiconductor processor licensing company Imagination Technologies, Ron Black, has been very vocal about his interest in acquiring the company, having amassed a reported £300m war chest from various parties. He said, "These strategic assets are dangerous to leave in such unstable conditions", referring to concerns about an exodus of key staff uncertain about their employer’s future. He further commented that delaying such a decision could lead to a Pyrrhic victory where the government prevents the takeover but loses all of the critical staff.
We will await the government decision with interest.