UK.gov's decision on Newport Wafer Fab ownership delayed for third time

Department of Business, Energy & Industrial Strategy yet to rule on sale of Brit biz to Chinese-owned Nexperia

The fate of Newport Wafer Fab remains undecided as yet another deadline for the final UK government decision on its sale to China-owned Nexperia passed without any confirmation for the staff or customers involved.

Newport Wafer Fab runs Britain's largest chipmaking facility, producing up to 32,000 silicon wafers a month, but it was sold in 2021 in a deal worth £63 million to Dutch company Nexperia, which is now a subsidiary of Chinese outfit Wingtech Technology.

The UK’s Department for Business, Energy & Industrial Strategy (BEIS) launched a belated national security assessmentof the sale in May, using powers gained under the National Security and Investment Act 2021 to examine whether the agreement should be reversed or allowed to stand.

A decision based on the findings of the investigation was expected in July, but the BEIS instead asked for an additional 45 days to consider the implications of allowing the sale. This additional 45 days ran into September, whereupon the department requested even more time to make a decision, giving itself until October 3 to come up with its absolutely final decision.

Now it seems like Newport Wafer Fab and Nexperia may have to continue to wait, as it appears BEIS may have more important things on its collective mind right now.

We asked the BEIS for an update on the security assessment, expecting to be given details on which way the government had decided to go with the decision, but instead a spokesperson for the department informed us:

“The only date formally communicated to us by the Investment Security Unit (ISU) remains October 3rd. But there are circumstances in which they can stop the clock, to look at specific issues more closely. We are not anticipating any announcement on Monday. Beyond that, we cannot comment further.”

As for BEIS, September 2022 was somewhat of an eventful month in the UK, with Liz Truss being declared the leader of the Conservative Party (and therefore de facto Prime Minister), which ushered in a change of many departmental heads, including former BEIS Secretary Kwasi Kwarteng. BEIS is now run by the haunted pencil that is Jacob Rees-Mogg. The funeral of Queen Elizabeth also interrupted the flow of normal government business, and the BEIS has also had its hands full with the energy crisis that has seen the unit price of energy double for consumers and businesses alike recently.

While making decision of the future of a Brit chip company may not be a priority for BEIS at the moment, further delays may prove to be more than a minor inconvenience for Newport Wafer Fab and Nexperia, neither of which will be able to move on until the UK government rules on the matter.

Back in July, Nexperia's UK country manager Toni Versluijs expressed his frustration with the security assessment to a BEIS Committee meeting, saying that his company needed certainty.

Versluijs said the "investigation needs to be done swiftly", claiming that Nexperia's customers "are becoming impatient on the clarity".

He also claimed that Nexperia had actually saved Newport Wafer Fab from bankruptcy, and denied speculation that Nexperia planned to close the fab and move operations abroad, claiming the company was investing in its UK operations instead.

The belated assessment looking into Nexperia’s acquisition of Newport Wafer Fab has followed a renewed awareness of the importance of technology to the UK as an industrial nation, amid fears the country was allowing its most valuable technological assets to be sold into foreign ownership.

However, the BEIS can move faster when the mood takes it: in August it announced it had used its powers under the NSIA to block the sale of Brit chip design software outfit Pulsic to a Chinese company on national security grounds. Pulsic is an electronic design automation (EDA) company that makes placement and routing tools that used in the design and development of the circuit layouts for chips. ®