Welsh Labour MP criticises UK Government over failure to block Chinese purchase of Welsh microchip manufacturer
A Welsh Labour MP has criticised the UK Government for not blocking a Chinese owned firm from purchasing a Welsh microchip manufacturer.
Swansea West MP Geraint Davies said that the £63m deal should not have gone ahead given China’s continued close ties with Russia despite the invasion of Ukraine.
The UK Government decided not to intervene in the takeover of Newport Wafer Fab by Nexperia, a Dutch subsidiary of the Chinese technology company Wingtech.
Newport Wafer Fab is the U.K.’s largest plant producing semiconductors, a critical component of electronic devices, including smartphones.
In July, Prime Minister Boris Johnson announced that he had asked the government’s national security adviser, Stephen Lovegrove, to look into the sale.
But according to UK Government sources, Lovegrove concluded there were not enough security concerns to block the sale, because Newport Wafer Fab uses 20-year-old technology which the Chinese already have.
Swansea West MP Geraint Davies said that the UK Government should have blocked the sale as China were “defending Russia against war sanctions and weaponising trade against democracies”.
The sale was also criticised by Tom Tugendhat, the chairman of the House of Commons foreign affairs committee, who said: “It’s not clear why we haven’t used our new powers under the National Security and Investment Act to fully review the takeover of one of our leading compound semiconductor companies.”
He added: “This is an area where China is sinking billions to compete. The government has no clear strategy to protect what’s left of our semiconductor industry.”
Sir Iain Duncan Smith, a former Conservative leader, also called the decision to sell the factory “ridiculous.”
He added: “Kwasi Kwarteng needs to stand up for access to key technologies in the West which China is determined to get control over.”
“If the Government goes down this road, it will become yet another step in the pathetic process of appeasing China who right now is supporting Russia and plans to pose a direct and deliberate threat to the West’s access to microchips and other key components for electronic equipment.”
China now controls more than nine per cent of the global semiconductor market, closing in on the EU which controls 10%.
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