The UK government has announced a full national security assessment of the acquisition of Newport Wafer Fab by Chinese-owned Nexperia.
Business Secretary Kwasi Kwarteng says the government has powers under the National Security and Investment Act 2021 to scrutinise and – if necessary – intervene in qualifying acquisitions on national security grounds.
He explained in a tweet: “We welcome overseas investment, but it must not threaten Britain’s national security.”
Nexperia is a Dutch company owned by China’s Wingtech Technology. As Bloomberg notes, the deal to buy the semiconductor plant, valued at around £63 million according to a person familiar with the matter, was completed ten months ago – but under the UK’s National Security Act, which came into effect on 4 January, ministers can retrospectively look into deals and even unpick them if they find national security concerns.
As a comparison, NVIDIA’s $40 billion (£29 billion) purchase of Arm from Japan’s SoftBank came under scrutiny and was finally terminated In February due to regulatory pressure.
- Read about NVIDIA calling off its £29bn Arm acquisition here
The UK government had previously said it wanted to examine the sale of Arm to the US firm on national security grounds.
In terms of the Newport Wafer Fab matter, the government now has 30 working days to carry out an assessment, under the law – though it can extend that timeline by another 45 days if it deems it necessary.
“We welcome this opportunity to engage and contribute to an informed debate about our UK activities and investment plans,” a spokesman for Nexperia states.
Nexperia hit back at suspicions it was under the sway of the Chinese state in an interview with Bloomberg last year.
The news about China trying to acquire foreign semiconductor technologies has been well documented in the mainstream media. The country is keen to develop its chip industry and reduce its reliance on imports.
Bloomberg explains that while Newport is not a major player in the global chipmaking space, it has received funding to make silicon carbide-based chips, also called “third-generation” chips which China wants.