PM asks for review of Chinese investment in Welsh semiconductor plant

Nexperia announced on Tuesday that it had obtained 100% ownership of Newport Wafer Fab

Prime minister Boris Johnson has ordered the UK’s national security adviser to investigate the recent acquisition of the country’s largest chip plant, Newport Wafer Fab (NWF), by Chinese firm Nexperia.

On Tuesday, the Chinese-owned company announced that it had obtained 100% ownership of the semiconductor production facility, with plans to rename the Welsh semiconductor manufacturer to Nexperia Newport.

However, the acquisition is now expected to be reviewed by the UK government, according to Johnson.

"We are looking into it. I have asked the national security adviser to review,” he told members of Westminster’s Liaison Committee, adding that the acquisition needs to be investigated on grounds of national security.

"We have to judge whether the stuff that they are making is of real intellectual property value and interest to China, whether there are real security implications,” he added.

NWF, which is based in Duffryn, South Wales, was established in 2017 and currently employs around 450 people. Its Newport site, established by INMOS, has employed local residents since 1982, and the acquisition by an overseas company could potentially mean moving the plant to a different location in the future.

However, the Newport site’s managing director Paul James hinted that the chip plant would remain in South Wales, describing the acquisition as “great news for the staff here in Newport and the wider business community in the region as Nexperia is providing much-needed investment and stability for the future”.

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Meanwhile, Conservative MP and Foreign Affairs Committee chairman Tom Tugendhat described the acquisition as “Britain's largest semiconductor foundry falling into the hands of an entity from a country that has a track record of using technology to create geopolitical leverage”.

Speaking to IT Pro on Tuesday, he said that the deal had been completed without undergoing a review under the National Security and Investment Act, a piece of legislation introduced in April.

On Wednesday, Johnson told the Committee members that he had been asked to review the acquisition by Welsh MPs. However, the Welsh government denied this, saying that it had “not made a request to the UK government to review the takeover of Newport Wafer Fab”.

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