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Chinese buyout of Newport microchip plant a 'security risk'





The takeover of Britain's largest microchip plant by a Chinese-owned company must be reversed, the UK government has said.


Newport Wafer Fab was acquired by Dutch-based technology company Nexperia, a subsidiary of Shanghai listed Wingtech, in July 2021.


However, Nexperia must now sell 86% of its stake "to mitigate the risk national security" following a review.


The firm said it was "shocked" and would appeal against the decision.


Semiconductors allow electricity to flow through devices and are the fundamental components of everything from smart phones to the vast data centres powering the internet and are found in millions of products.


The Wafer Fab deal came under scrutiny amid an ongoing global shortage of computer chips which has been exacerbated by the pandemic and severely hit a wide range of industries.


At the time of the takeover, the Newport plant was producing about 35,000 wafers a year.


The UK government had faced pressure to intervene, not least from the Commons Foreign Affairs Committee, which said that Nexperia's takeover represents the sale of "one of the UK's prized assets" to a strategic competitor and potentially compromised national security.


In its decision, the UK government said the takeover of Newport Wafer Fab created two risks to national security.


The first related to Nexperia's development of the Newport site, which the government said could "undermine UK capabilities" in producing compound semiconductors.


The second, the plant's location as part of a semiconductor cluster on the Duffryn industrial estate, could "facilitate access to technological expertise and know-how".


It said the close links that existed in Newport "may prevent the cluster being engaged in future projects relevant to national security".

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