The British government has delayed for another two months its final judgment on whether to allow the acquisition of Britain’s largest semiconductor plant by a Chinese company.
Kwasi Kwarteng, business secretary, was set to make a final decision by Tuesday night on the purchase of Newport Wafer Fab by Nexperia, a Dutch subsidiary of Chinese company Wingtech.
However, Kwarteng has sought a further 45 working days to analyse the controversial takeover amid a wider cooling of relations between London and Beijing.
The move comes despite the head of the company publicly calling on Tuesday for a rapid decision to end the cloud of uncertainty hanging over it.
The business secretary announced in May that he was calling in the acquisition under the new National Security and Investment (NSI) Act.
The NSI Act, which came into force on January 4 this year, allows greater scrutiny of foreign takeovers of companies in sensitive industries.
Kwarteng intervened despite the fact that in March the government’s national security adviser, Stephen Lovegrove, had found insufficient reasons to cancel the purchase on specific security grounds, given the company’s outdated technology.
Yet others have spoken out against the deal, including Ciaran Martin, former head of the National Cyber Security Centre.
Other senior figures in the government had also warned that the sale of Newport Wafer Fab, which produces silicon wafers at its plant in south Wales, to a Chinese buyer would undermine one of the country’s strategic industries.
Toni Versluijs, UK head of Nexperia, said on Tuesday that workers and customers of Newport were becoming “impatient” over the review, with 450 jobs in the Welsh city hanging in the balance. “Our customers are becoming impatient for clarity,” he told MPs.
Speaking to MPs on the business select committee, Versluijs said “it was in everyone’s interests to get clarification” on the deal and urged the government to conduct the review “swiftly”.
He added: “Last Friday one young lady in Newport stepped into her general manager’s office and said ‘Look I’ve just bought a new house. After this review will I still have a job?’”
Versluijs said his company had invested tens of millions of pounds in its plants in Newport and Manchester and rejected rumours that the company was planning to shift production abroad.
“We have invested big time in Manchester and Newport,” he said. “We are here to stay. We want to work in the local ecosystem and enable the local ecosystem and the UK semiconductor industry to be successful.”
Newport Wafer Fab is one of the four main companies that make up the Welsh semiconductor “cluster”, alongside IQE, SPTS Technologies and Microchip, making components for electric vehicles and smartphones.
Since Boris Johnson became UK prime minister in 2019, the government has reversed plans to allow Chinese telecoms equipment maker Huawei to supply kit for Britain’s 5G phone networks. He has also intervened to block an investor linked to Beijing from taking control of the board of Imagination Technologies, a British chip designer.
Source: Financial Times