Newport microchip factory owners prepare legal challenge to UK Government sale demand

The owners of Newport Wafer Fab, the UK’s biggest microchip factory, have instructed US law firm Akin Gump to challenge the UK Government’s decision to force it to sell at least 86% of the company.

Chinese-backed Nexperia was instructed to sell the majority of Newport Wafer Fab last month by UK Business Secretary Grant Shapps following a security review.

The Telegraph revealed earlier this month that Nexperia had filed a judicial review with the High Court to challenge the decision to block the £63m takeover of the Welsh plant, which was originally announced in 2021.

Nexperia, which is headquartered in the Netherlands, said it did not accept the national security concerns raised.

“We are genuinely shocked. The decision is wrong, and we will appeal to overturn this divestment order,” Nexperia’s UK country manager, Toni Versluijs, said in a statement last month.

Disproportionate

The company also claims the sanctions announced are disproportionate and has accused UK ministers of failing “to enter meaningful dialogue” over the sale and had not responded to its attempts to offer remedies, such as appointing a government executive to the company’s board.

An initial security review by the UK Government waived through the deal last year, before it was called in by former business secretary Kwasi Kwarteng in May this year.

Washington based Akin Gump is one of the biggest law firms in America and is ranked as the largest lobbying firm in the United States by revenue.

Earlier this month a delegation of Senedd Members and Welsh Labour MPs visited the factory to raise their concerns about the UK Government’s decision.

Pressure

Newport West MP Ruth Jones said: “The UK Government’s handling of the Final Order decision has imperilled over 500 jobs. We’ll keep up the pressure in Parliament and do all we can to protect them.”

A Welsh Government spokesperson said: “Our immediate priority now is to safeguard the future of the hundreds of highly skilled jobs in Newport”.

“We remain fully committed to ensuring the continued development of our compound semiconductor cluster in south east Wales and the role it plays on a wider UK scale.

“In light of the UK Government’s decision, UK Ministers now clearly view the compound semiconductor sector in Wales as a strategic national asset as well as being internationally recognised.

“We therefore call on the UK Government to invest in the sector to safeguard its future.”