Chinese-owned Nexperia confirms acquisition of UK’s largest chip plant

Nexperia, a Dutch chip firm owned by China’s Wingtech, confirmed on Monday that it plans to acquire the U.K.’s largest chip producer, Newport Wafer Fab. It comes after two people close to the deal told CNBC on Friday that the acquisition would be formally announced early this week. Nexperia, which became NWF’s second-largest shareholder in 2019, said the acquisition will help it to make more chips and meet soaring demand.

Achim Kempe, Nexperia’s chief operations officer, said in a statement: “The Newport facility has a very skilled operational team and has a crucial role to play to ensure continuity of operations. We look forward to building a future together.” The financial details of the deal were not disclosed, but two CNBC sources said that it’s worth around £63 million ($87 million). Concerns have been raised that the U.K. is selling a prized asset to a Chinese-owned company at a time when there’s a global chip shortage that could last until 2023.

Tom Tugendhat, leader of the U.K. government’s China Research Group and chairman of the Foreign Affairs Select Committee, told CNBC on Monday that he’s very surprised the purchase is not being reviewed under the National Security and Investment Act, which was introduced in April. “Having been in touch with partners in the U.S. and around the world, I know I am not alone,” he said.

“The semiconductor industry sector falls under the scope of the legislation, the very purpose of which is to protect the nation’s technology companies from foreign takeovers when there is a material risk to economic and national security,” he said. “When the U.K. signed the Carbis Bay G7 communique, we pledged to take steps to build economic resilience in critical global supply chains, such as semiconductors. This appears to be an immediate and very public reversal of that commitment.”

The U.K. competition regulator announced an investigation into Nvidia’s $40 billion bid for Cambridge-based Arm, whose chip designs are used by chip manufacturers around the world. The investigation was launched in January, roughly four months after the deal was first announced.

Chinese-owned Nexperia confirms acquisition of UK’s largest chip plant, CNBC, Jul 6