Newport Wafer Fab has greater than a dozen UK authorities analysis contracts, together with a protection contract, regardless of being offered to Chinese language-owned Nexperia.
The rationale for the federal government’s intervention by the UK’s largest chip producer (Newport Wafer Fab) right into a Chinese language-owned firm has maybe develop into clearer this week.
Earlier this month it was revealed that Newport Wafer Fab (NWF) was to be acquired by Dutch chip agency Nexperia, which is itself owned by Chinese language agency Wingtech.
The undisclosed buy worth was apparently simply £ 63 million ($ 87 million), which has been questioned as too low-cost for a superb.
Newport Wafer Fab is headquartered in Newport, Wales, and is a excessive quantity 200mm wafer manufacturing facility that makes silicon chip utilized in energy provide purposes for the automotive business, which has been notably exhausting hit. because of the scarcity of chips.
The manufacturing facility has additionally been creating extra superior “composite semiconductors”, that are quicker and extra vitality environment friendly.
As quickly because the Nexperia acquisition was introduced, Tom Tugendhat MP, head of the UK authorities’s China Analysis Group and chairman of the Overseas Affairs Choose Committee, instantly raised nationwide safety issues.
Tugendhat expressed concern that the UK is promoting a prized asset to a Chinese language-owned firm at a time when there’s a international chip scarcity that might final till 2023.
Simply a few days after that concern was raised, Prime Minister Boris Johnson ordered a evaluation of the Newport Wafer Fab acquisition.
The prime minister requested his nationwide safety adviser (Stephen Lovegrove) to evaluation Nexperia’s buy of Newport Wafer Fab.
“We have now to guage if the issues they’re doing have actual mental property worth and curiosity to China, if there are actual safety implications,” Johnson stated on the time.
But it surely has now emerged that Newport Wafer Fab has greater than a dozen UK authorities analysis contracts, in line with a doc seen by CNBC.
And at the very least one of many contracts includes the event of chip expertise for a radar system that may be utilized in fighter jets.
The contracts are largely funded by Innovate UK, the British authorities’s innovation company, by means of varied grant schemes amounting to round £ 55 million ($ 75 million), a supply informed CNBC.
“I do not assume anyone realized that there have been a few defense-related tasks,” the supply stated.
NWF manufactures the wafers on which digital circuits are printed.
Nexperia reportedly declined to remark, and Wingtech didn’t instantly reply to a request for remark from CNBC.
The Lovegrove workforce reportedly requested firms and people with data of NWF final week what the plant does and for whom, the CNBC supply stated.
The supply added that Lovegrove’s workforce obtained an inventory of NWF contracts, seen by CNBC, and reported that Nexperia plans to terminate a few of them so it might give attention to delivery chip wafers to China.
Lovergrove is predicted to report its suggestions in a few weeks.
The semiconductor sector has gained geopolitical prominence as China has singled it out as a key expertise for the economic system of the longer term.
It ought to be recalled that the UK competitors watchdog is investigating Nvidia’s $ 40 billion supply for Cambridge-based ARM, whose chip designs are utilized by chipmakers world wide.
That investigation started in January, and the federal government in April raised its personal nationwide safety issues, even supposing Nvidia is an American firm.
Nevertheless, the UK will not be the one nation questioning purchases by Chinese language firms in current occasions.
South Korea not too long ago launched a evaluation after Beijing-based Sensible Highway Capital agreed to a deal to purchase semiconductor firm MagnaChip.
In March, the Italian authorities blocked Chinese language firm Shenzhen Funding Holdings from buying a majority stake in LPE, a Milan-based semiconductor firm.