Owner of Britain's biggest microchip factory denies it will move operations to China

·3 min read
nexperia newport wafer fab - Matthew Horwood /Getty Images Europe
nexperia newport wafer fab - Matthew Horwood /Getty Images Europe

The Chinese-backed owner of Britain's biggest microchip factory has denied it will close the facility and move operations to Shanghai if ministers approve the deal.

Nexperia, which is owned by Shanghai-listed Wingtech, said suggestions it will relocate the Newport Wafer Fab's production abroad are "nonsense".

The company bought Newport Wafer Fab last year for £63m in a deal that is currently being reviewed by ministers.

The denial comes after critics of the deal claimed that it was likely to close the facility in South Wales once it had built up sufficient capacity in China.

According to a report from researchers at the Policy Exchange think tank, opponents of the deal have claimed "there is a strong possibility that when Wingtech’s Shanghai plant reaches full capacity the company might close Newport and shift production to China, thus supporting China’s drive to reduce semiconductor imports".

Those calling for the acquisition to be reversed have suggested that Kwasi Kwarteng, the Business Secretary, should consider the possibility when he is deciding whether to undo the deal, the report said.

Policy Exchange said Mr Kwarteng would have to weigh the benefit of investment in Newport Wafer Fab, which struggled during the pandemic.

Nexperia strongly denied the company would close the Newport factory in future.

A spokesman said: “This is complete nonsense. There is no factual basis for such idle conjecture. In addition to acquiring the Newport Wafer Fab site, repaying a £17m loan to the Welsh Government, Nexperia has committed a further £160m of new investment to its UK business in the past year, to help respond to strong global demand for semiconductors.

"This investment has secured the 450 high value manufacturing jobs at Newport, with a further 50 people hired already, as well as the 1,000 at our Manchester site.

"Those are not the actions of a business that is about to shut up shop.”

The takeover of Newport Wafer Fab last year provoked a furious backlash from some MPs, amid concerns about growing Chinese ownership of technology assets around the world.

Nexperia is 100pc owned by Wingtech, a Chinese company listed on the Shanghai Stock Exchange.

Mr Kwarteng announced a national security review of the takeover in May. The plant fell into financial trouble during the pandemic, allowing Netherlands-based Nexperia, which owned 14pc of Newport Wafer Fab, to exercise an option to buy it.

Ministers had initially waved through the deal but Mr Kwarteng later ordered a detailed review under new national security legislation.

The laws give him the power to reverse the takeover once an investigation has been carried out.

Calls for the takeover to be blocked have grown amid a global chip shortage and increasing concerns over China’s technology ambitions.

A group of US Members of Congress has urged Joe Biden to intervene if the takeover is not reversed, saying the UK should be removed from a security whitelist that allows British investments in America to avoid screening.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting