Government delays decision on Newport Wafer Fab sale

The wait could stretch further if witnesses are asked to testify.

The UK Government has delayed its final decision on whether to approve the £63m purchase of the country's largest semiconductor plant, Newport Wafer Fab (NWF), by Chinese-owned company Nexperia for another 45 days.

The (current) Business Secretary Kwasi Kwarteng was expected to announce conclusions on the acquisition by Tuesday. However, he has now requested an additional 45 working days.

Lawyers warn that if witnesses are asked to testify about the deal, the delay could become much longer.

The Government has formally told Nexperia about the extension.

Nexperia is a Netherlands-based subsidiary of Wingtech Technology, a Chinese firm that receives partial funding from the Chinese government.

Nexperia acquired NWF last year, although the deal has been the subject of an inquiry since May in accordance with the newly enacted National Security and Investment (NSI) Act.

The NSI Act, which came into force on 4th January this year, allows closer examination of foreign acquisitions of British firms operating in sensitive sectors.

Given that NWF has several contracts with the UK Government, including for defence-related projects, any potential acquisition is very sensitive.

The review might result in the Government blocking the deal, demanding corrections, or approving it.

This week Toni Versluijs, Nexperia's UK president, told the Business, Energy, and Industrial Strategy (BEIS) committee that the review was making employees, investors and customers "impatient." He added that the fate of 450 jobs are "in limbo" as a result.

"Our customers are becoming impatient for clarity," he said.

Laws like the NSI Act are not unusual in an international setting, and other countries have similar legislation. Versluijs noted that Nexperia was aware that concerns around national security need to be investigated, but stressed that "[the] investigation needs to be done swiftly".

He also told MPs the firm had no intentions to close the factory or move operations abroad.

Versluijs also said there had been a great deal of misinformation surrounding the transaction. He claimed that Nexperia had really prevented the Newport Wafer Fab from going bankrupt.

"If you look at the facts, then Nexperia saved, actually, Newport from bankruptcy. I mentioned already the £160 million investments by the way, no strings attached for any additional government support on that."

When questioned about the rumoured loss of a compound semiconductor production line at NWF, Versluijs blamed the news on a misinformation campaign.

Lawmakers have criticised the Government for being sluggish to take action on the NWF sale, especially at a time when other countries are developing their domestic semiconductor capabilities amidst the global chip shortage.

Last year, Boris Johnson said he did not want anti-China sentiments to push Chinese investment away from the UK.

In April Tom Tugendhat, head of the Foreign Affairs Committee, said the UK's long-term security depends not just on its armed forces, but also on the strength of its economy.

He indicated that the country's future stability should never be "sacrificed for the sake of short-term advancement."