Former Newport Wafer Fab owner linked to buyback from China's Nexperia

If you think customers were impatient before, this report won't soothe their worries

The former owner of Newport Wafer Fab (NWF) is being linked with a buyback of the business that he sold to China's Nexperia, a sale currently being reviewed on grounds of national security by the British government.

The FT reports that Drew Nelson – who ran the UK's largest semiconductor maker before it was bought for £63 million ($72 million) in 2021 by Netherlands-based Nexperia, which is itself owned by Hong Kong's Wingtech Technologies – is linking arms with private equity biz Palladian Investment Partners to lodge a bid for NWF.

Nelson was said to be offered first refusal on a buyback, as per the terms of the takeover. He ran Wales-based wafer supplier IQE until the close of 2021, and incorporated a new entity branded Newport Wafer Fab 10 in the UK in July last year.

The Register has asked Nelson and Palladian Investment Partners to comment.

NWF operates the UK's largest semiconductor manufacturing operation, making around 32,000 wafers a month. This is why the UK government stepped in and continues to scrutinize implications of the sale, using powers from the National Security and Investment Act 2021 to take a closer look.

Nexperia already held a 14 percent shareholding in NWF before the buyout, and, according to a source quoted in the report, the UK administration is considering asking the company to reduce the ownership substantially.

A decision on the current national security assessment is due in October, Nexperia told us earlier this month, after the Department for Business, Energy & Industrial Strategy's (BEIS) prior deadline came and went, for the second time. The process began in May.

"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," a spokesperson for BEIS told us last week.

Nexperia spoke to a BEIS Committee in July and told it the protracted decision-making was a source of "frustration" for the company, adding the "investigation needs to be done quickly" as "customers are becoming impatient on the clarity."

The company's UK manager, Toni Versluijs, added: "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."

Another chip veteran, Ron Black, the former boss of Imagination Technologies, which was itself blocked from being sold to Chinese owners, told the FT that the longer the UK government deliberate the greater chance that it will lose valuable staff.

"These assets are very dangerous to leave in unstable conditions," he said. ®