Owners of Newport microchip factory ‘shocked’ after UK Government demands its sale over national security concerns

The owners of a Newport microchip factory have said that they are “shocked” after the UK Government said they had to sell most of it.

Chinese-owned technology company Nexperia must sell at least 86% of Newport Wafer Fab, which is the UK’s biggest microchip factory, following a national security assessment.

“Today I’ve issued a Final Order under the NSI Act requiring Nexperia to sell at least 86% of Newport Wafer Fab,” Business Secretary Grant Shapps said on Twitter.

“We welcome foreign trade and investment that supports growth and jobs. But where we identify a risk to national security we will act decisively.”

The Commons Foreign Affairs Committee had said last year that the sale of Wafer Fab to a “company with links to the Chinese Communist Party” had resulted in one of the UK’s “prized assets” going to a “strategic competitor”, and could potentially compromise national security.

The Secretary of State considers that the risk to national security relates to:

• Technology and know-how that could result from a potential reintroduction of compound semiconductor activities at the Newport site, and the
  potential for those activities to undermine UK capabilities;
• The location of the site could facilitate access to technological expertise and know-how in the South Wales Cluster, and the links between the site and the Cluster may prevent the Cluster being engaged in future projects relevant to national security.

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.

Jobs

Following the move by the UK Government, a Welsh Government spokesperson said: “The UK Government’s decision has provided some welcome clarity.

“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.”