UK Government Orders Chinese Firm to Sell Acquired Welsh Semiconductor Plant

UK Government Orders Chinese Firm to Sell Acquired Welsh Semiconductor Plant
Undated file photo of UK Business Secretary Grant Shapps. (PA Media)
Lily Zhou

The UK government on Nov. 16 ordered a Chinese company to sell most of a Welsh semiconductor plant it had acquired, ruling the takeover breached national security laws.

The Department for Business, Energy, and Industrial Strategy (BEIS) issued a notice of final order (pdf) telling Nexperia BV to sell at least 86 percent of Nexperia Newport Limited “within a specified period and by following a specified process.”

Nexperia Newport Limited, previously named Newport Wafer Fab (NWF), is the UK’s largest microchip company.

Nexperia, a Dutch-based semiconductor manufacturer that’s wholly owned by China’s Wingtech Technology, confirmed on July 5, 2021, that it had acquired 100 percent ownership of NWF.

Initially, the government concluded after a probe in March by the UK’s national security adviser there were insufficient reasons to block the deal because it was believed the company produced outdated technology.

But with multiple contracts with the UK government, including defence-related projects, the government has been forced to investigate the deal again.

Former Business Secretary Kwasi Kwarteng announced the probe in May after weeks of pressure from politicians and concerns from Washington.

In its notice of final order, the BEIS said that Business Secretary Grant Shapps considers that a risk to national security relates to “technology and know-how that could result from a potential reintroduction of compound semiconductor activities at the Newport site, and the potential for those activities to undermine UK capabilities.”

The notice also said the location of the site “could facilitate access to technological expertise and know-how in the South Wales Cluster (“the Cluster”), and the links between the site and the Cluster may prevent the Cluster being engaged in future projects relevant to national security.”

It’s the sixth notice the government has issued to Chinese companies under its new National Security and Investment Act.

On July 20,then-Business Secretary Kwasi Kwarteng issued an order under the new law to block Beijing Infinite Vision Technology Co. from buying vision-sensing technology from the University of Manchester.

In an Aug. 17 order, Kwarteng blocked the acquisition of Bristol-based electronic design automation company Pulsic by Super Orange HK Holding—reportedly controlled by Shanghai UniVista Industrial Software Group.

On Sept. 14, then-Business Secretary Jacob Rees-Mogg imposed restrictions on the acquisition of the Stonehill project, an energy storage project in Wiltshire, by Beijing-controlled Stonehill Energy Storage Ltd. The restrictions are similar to the ones imposed on the acquisition of XRE Alpha Limited.

On Sept. 29, Rees-Mogg blocked Redrock Investment Ltd., a subsidiary of China’s state-owned State Development and Investment Corp., from accessing sensitive information about Britain’s power grid.

On Oct. 10, he imposed restrictions including informations sharing on the acquisition Ligeance Aerospace Technology Co. Ltd by Sichuan Development Holding Co., Ltd, which involves two UK-bases subsidiaries Gardner Aerospace Holdings Limited and Gardner Group Limited.

Nexperia said it was “shocked” by the UK government’s decision.

In a statement, the company said it doesn’t accept the national security concerns raised and accused the government of ignoring the “far-reaching remedies” it said it had offered to address the concerns.
Peter Simpson and Alexander Zhang contributed to this report.
Correction: A previous version of this article incorrectly stated the number of times Chinese companies have been issued notices. The Epoch Times regrets the error.
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