UK Gives Nod to Chinese Takeover of Newport Wafer Fab
A huge political spat erupted in the UK over plans to sell the Newport fab to the Dutch subsidiary of China's Wingtech Technology, one of the few fabs in the country still operating. One of the factories that manufactures semiconductors.
The government has approved the deal, which is said to be worth around £63 million (about 75 million euros), despite a prolonged review of the national security interests involved in the proposed deal.
Back in July 2021, the UK government had directed National Security Adviser Sir Stephen Lovegrove to review the deal. The latest news shows that Sir Lovegrove has concluded that there were not enough security concerns to stop the deal.
But many in the UK government and the opposition Labour Party say censorship defines "national security" too narrowly.
Perhaps the strongest criticism came from Ton Tugenhadt, chairman of the House of Commons Foreign Affairs Committee, who suggested: "It is not clear why we have not used the new powers under the National Security and Investment Act to review a takeover of one of our companies. Leading compound semiconductor factories. The bill, which went into effect in January, could have had mixed results.
Tugendhat noted that the committee he chaired did not provide much detail, and he doubted even a review had taken place.
"This is an area where China is investing billions of dollars to compete. The government has no clear strategy to protect the rest of our semiconductor industry," he added.
Former British Prime Minister Iain Duncan-Smith warned: "If the government goes down this path, it will be a direct result of appeasing Russia's current support for Russia and its plans for Western access to microchips and other electronics. A way for threats. Devices. Access to critical components.”
On the other side of the political spectrum, Mike Clancy, secretary-general of Prospect, a coalition of science and civil servants, said: "This is a further blow to the UK's leadership in this critical high-tech sector. If the government really wants to build high-tech A productive, high-wage economy, we need a new strategy to protect and expand the UK's long-term capabilities in the semiconductor industry."
Acquisition Significance
Nexperia, a subsidiary of Wingtech in Amsterdam, the Netherlands, is a major customer of Newport Wafer Fab equipment.
Newport Wafer Fab is the largest chip manufacturer in the UK, but compared with leading chip manufacturers such as TSMC and UMC, Newport Wafer Fab is not large and is currently at a loss. The plant currently employs about 450 people.
According to the announcement, the total assets of Newport Wafer Fab in the 2020 fiscal year were 44.7076 million pounds, the net assets were -5.1773 million pounds, the operating income was 30.911 million pounds, and the 2020 fiscal year loss was 18.611 million pounds. , Wingtech said that the above data accounted for a small proportion of the relevant financial data of listed companies and had no significant impact on the company's production and operation.
Previously, Wingtech acquired European semiconductor giant Nexperia for 26.8 billion yuan, which became the largest semiconductor merger of the year. It should have accumulated a lot of experience in multinational operations and loss management.
The acquisition will be in line with Nexperia's business. Nexperia Group is a leading manufacturer of discrete and power chip IDMs. The acquisition of Newport will effectively enhance Nexperia's automotive-grade IGBT, MOSFET, analog and compound semiconductor products. Domain IDM functionality.
