A Chinese technology company has been told to sell a majority of its stake in a UK silicon chip factory due to security concerns.
Nexperia must reduce its stake in Newport Wafer Fab by 86%, returning to the 14% it held when it took over the company in 2021, in an effort to “reduce national security risks,” the government said.
Nexperia was shocked and dismayed by the statement, saying it did not accept the state’s justification and that 500 jobs were now at risk.
“The far-reaching remedies proposed by Nexperia to fully address the government’s concerns have been completely ignored,” the company said in a statement.
“The UK government chose not to engage in meaningful dialogue with Nexperia, or even visit the Newport factory.
“More than 500 Newport employees have also raised their own significant concerns about this divestment – the government has chosen not to listen to them and has made this decision which has cost them and their families the livelihood and the livelihood of more than 1 Hundreds of millions of taxpayers’ money is at stake completely needlessly.”
The company said it would challenge the order in an effort to preserve factories and jobs.
Acquired Newport Wafer Fab factory investigated by the government on national security issues.
The factory has been key parts, to produce tiny silicon chips.Currently there is a Global semiconductor shortage This applies to cars and everyday electronics.
The investigation is being conducted under the new National Security and Investment Law, which gives the government powers to intervene in deals retroactively. Nexperia has reportedly completed the acquisition of Newport Wafer Fab for £63 million.
Both industry and members of Congress have raised safety concerns.
A statement by the Department for Business Energy and Industrial Strategy on Wednesday pointed to safety concerns, saying potential compound semiconductor development at the Newport site could “undercut UK capabilities”.
Ciaran Martin, former chief executive of the UK’s National Cyber Security Centre, said the acquisition posed a greater threat to UK interests than the Chinese company’s involvement in 5G networks.
Tom Tugendhat, the former chairman of the House of Commons foreign affairs committee, has expressed concern that companies, especially Chinese ones, have a record of using foreign investment to gain access to vital technology and information.
The release of the findings has been delayed. The original decision deadline was June, but BEIS asked for a decision within a 45-day period.
It is gripped by further delays as the Tory leadership race continues over the summer, with the government playing a political chair-scratching role following the departure of the former prime minister Quasi-Quarteng and the subsequent former Prime Minister Leeds Truss.
The extended September and October deadlines passed without a decision.
What happens next is unclear. The Financial Times reported that previous owner Nielsen wanted to buy back the company. Under the terms of Nexperia’s acquisition, Nelson had the first opportunity to buy it back.
Nexperia has always said it and its parent company, Wingtech, are separate from the Chinese government.