The business division’s decision on Wednesday comes more than a year after semiconductor company Nexperia first announced it had taken control of Newport Wafer Fab in south Wales in July 2021 in a £63m deal. The company, now known as Nexperia Newport, makes chips used to manage power in electronic devices. Nexperia is based in the Netherlands, but is owned by China’s Wingtech. In announcing the final order, the Department for Business, Energy and Industrial Strategy (BEIS) said the Secretary of State considered the risk to national security related to “technology and know-how that could arise from a potential reintroduction of compound semiconductor activities into Newport site, and the potential for these activities to undermine the UK’s capabilities’. BEIS also noted: “The location of the site could facilitate access to technological expertise and know-how in the south Wales cluster (‘the cluster’) and links between the site and the cluster may prevent the cluster from participating in future projects related to National Security.” The decision will raise questions about the future of the jobs of 550 workers at the Newport site as well as those of 1,000 people at a separate Nexperia facility in Stockport. Nexperia UK boss Toni Versluijs said the company was “really shocked”. “The decision is wrong and we will be appealing for this divestiture order to be overturned to protect more than 500 jobs in Newport,” he said. “This decision sends a clear message that the UK is closed for business. The UK is not raising the bar, it is flattening communities like south Wales.’ Versluijs said the decision was legally wrong and disproportionate given the remedies the company proposed for government concerns, such as a pledge not to make more sophisticated compound semiconductors. Nexperia Newport is not big by global chipmaking standards, with revenues of £31m in its last reported financial year, compared with £36bn for Taiwan Semiconductor Manufacturing Company, the industry giant that makes cutting-edge chips. But the takeover has sparked concerns about the future of the UK’s chip industry, some of whose products are used in defence, and its ownership by a company that could be swayed by a geopolitical rival. Countries around the world have sought to boost their domestic semiconductor industries amid concerns about reliance on manufacturers in Taiwan, which China claims as its territory, and South Korea. The US plans to invest $52bn (£44bn) in the chip industry, while the EU has said it will invest €43bn (£38bn). Subscribe to Business Today Get ready for the business day – we’ll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. Kwasi Kwarteng, who was business secretary at the time before a chaotic 38-day stint as chancellor, ordered an investigation into the Nexperia takeover in May under the new National Security and Investments Act, which was introduced earlier this year . The government delayed a final decision in early July, giving it until midnight on Wednesday. Tom Tugendhat, an outspoken critic of the Chinese government who now serves as UK security secretary under Rishi Sunak, was among politicians pushing for a review of the takeover on security grounds. The review prompted two British chipmaker executives to express interest in buying the company if the Nexperia deal is blocked. Ron Black, former chief executive of Imagination Technologies, led a consortium which said it had received pledges of £300m in backing, while former Newport Wafer Fab owner Drew Nelson was also working on a potential deal with private equity firms Financial Times. reported in September. Versluijs in July told MPs that the company had no plans to move its operations overseas.
