Newport Wafer Fab sale to Chinese company held up again by UK.gov's probe

To sell or not to sell... that is the national security assessment, decision delayed once more

The UK government has asked for more time to make its final decision on whether to retroactively approve or block the sale of Newport Wafer Fab (NWF) company to Chinese owners.

The Department for Business, Energy & Industrial Strategy belatedly launched a full blown assessment of the sale in May on grounds of national security. This came 10 months after NWF shares were transferred to Netherlands-based Nexperia, itself controlled from Hong Kong by Wingtech Technologies.

NWF runs Britain's largest chipmaking facility and manufactures some 32,000 wafers a month. It is for this reason that ministers took a keen interest in the future ownership, leaning on powers gained under the National Security and Investment Act 2021 to probe the agreement.

Kwasi Kwarteng, Secretary of State for BEIS, was widely tipped to publish findings of the investigation in early July but instead asked for an additional 45 days to delve deeper into the implications of a sale. Now the department has requested yet more time to ruminate and cogitate.

A spokesperson at BEIS told The Register:

"The Secretary of State has agreed a voluntary period with Nexperia BV regarding their acquisition of Newport Wafer Fab, to consider whether to make a final order under the National Security and Investment Act and, if so, what provision a final order should contain."

The spokesperson said they were unable at this time to comment on "details of businesses’ commercial transactions, or on national security assessments." They also refused to provide a firm deadline on a decision.

However, a spokesperson for Nexperia BV told us UK government had “extended the Nexperia Newport review” that provides an extension until "3 October 2022."

Nexperia's UK country manager Toni Versluijs told a BEIS Committee earlier in the summer that the length of time the probe was taking was a frustration, saying the "investigation needs to be done swiftly" and customers "are becoming impatient on the clarity."

"Last week, a young lady in Newport stepped into the office of a general manager. And she said, 'Look, I just bought a new house. After this review, will I still have a job?' I think it's in everybody's interest to give clarification."

Management at Nexperia and Wingtrech Technologies will have watched with interest last month as the UK administration blocked the sale of a British chip design software house, Pulsic Limited, to China-based Super Orange HK Ltd.

This deal was considered a national security risk because the floor planning, placement and routing tools used in the design and development of the circuit layouts for chips, and the expertise to use them, qualified as dual use tech that could be used in a civilian or military supply chain.

Other national security cases under consideration have included the purchase by French tycoon Patrick Drahi of BT stock, which was approved, and the licensing of IP by the University of Manchester to Beijing Infinite Vision Technology, which was blocked. ®

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