UK to review purchase of Newport Wafer Fab by China's Nexperia

Security adviser examines Chinese takeover of British semiconductor plant

There is a global shortage of semiconductors, making the Newport factory a prized part of the global supply chain. AFP

Britain’s national security adviser is examining the purchase by a Chinese-owned firm of the country’s biggest chip manufacturing plant.

The deal for a vital industrial asset sparked widespread controversy amid increasingly strained relations between the UK and China and growing scrutiny of Chinese companies and their overseas investment strategies.

The sale of Newport Wafer Fab, in Wales, to Nexperia, which is based in the Netherlands but owned by China's smartphone company Wingtech, was completed this week.

“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," Prime Minister Boris Johnson told Parliament’s Liaison Committee.

“I have asked the national security adviser to look at it.”

A Welsh government spokesman said no request was made for the UK to review the takeover.

The deal helped secure both the company’s future and semiconductor production in Wales, Newport Wafer Fab's outgoing chairman Drew Nelson said.

But it reignited debate over China's push into strategically important sectors around the world, including Western nations.

There is a global shortage in semiconductors, making the factory a prized part of the global supply chain.

Nexperia, which completed the deal on Monday, did not reveal any of the financial details. But US television channel CNBC reported Nexperia paid £63 million ($87m).

The UK last year banned Chinese telecoms giant Huawei from involvement in the delivery of Britain's superfast 5G broadband network, after US concerns about spying.

Branding Huawei a security threat, the US barred the company from the American market, cut it off from global supply chains and pressured allies to ban or remove Huawei gear from their national telecoms systems.

Computer chips are vital for manufacturing and their sales were boosted by a pandemic-fuelled surge in demand for home electronic devices.