Government Again Delays Decision On Newport Wafer Fab

Government again delays its national security decision over whether a Chinese entity can acquire Newport Wafer Fab.

Back in July 2021 it was revealed that Newport Wafer Fab (NWF), the UK’s largest largest chip producer, was being acquired by Dutch chip firm Nexperia for just £63 million ($87 million).

However concerns immediately surfaced over the fact that Nexperia is in turn owned by a Chinese chip firm called Wingtech Technology.

British chipmaker

Newport Wafer Fab is based in Newport, Wales, and it is a high volume 200mm wafer fab that makes silicon chips used in power supply applications for the car industry.

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

NWF also makes the wafers that electronic circuits are printed onto, and it manufactures some 32,000 wafers a month.

Some of its work is also potentially sensitive as Newport Wafer Fab has over a dozen UK government research contracts.

Indeed, at least one of contracts involves developing chip technology for a radar system that would be used in fighter jets.

As soon as the Nexperia acquisition was announced last year, national security concerns were immediately raised by Tom Tugendhat MP, leader of the UK government’s China Research Group and chairman of the Foreign Affairs Select Committee.

Tugendhat at the time voiced his concerns that the UK was selling a prized asset to a Chinese-owned company, when there was a global chip shortage.

National security review

Just a couple of days after that concern was voiced, former Prime Minister Boris Johnson ordered a review of the acquisition of Newport Wafer Fab.

Then in May this year, the government’s full national security review of the purchase finally began.

In July former business secretary, Kwasi Kwarteng delayed making a decision on the deal for another 45 days until 5 September.

Using the National Security and Investment Act, Kwasi Kwarteng had the option to either block the deal, demand remedies, or allow it to go ahead.

Another delay

But the UK political landscape has changed, after Kwasi Kwarteng was appointed by new Prime Minister Liz Truss, as new Chancellor of the Exchequer.

Jacob Rees-Mogg was appointed Secretary of State for Business, Energy and Industrial Strategy.

This meant that a government decision about Newport Wafer Fab was delayed until 3 October.

But now it seems that a decision is being delayed again.

“The only date formally communicated to us by the Investment Security Unit (ISU) remains October 3rd,” a spokesperson for the UK’s Department for Business, Energy & Industrial Strategy (BEIS) told the Register on Tuesday.

“But there are circumstances in which they can stop the clock, to look at specific issues more closely,” the spokesperson told the Register. “We are not anticipating any announcement on Monday. Beyond that, we cannot comment further.”