2 min Security

UK orders China’s Nexperia to sell microchip factory over security concerns

UK orders China’s Nexperia to sell microchip factory over security concerns

Citing a national security review, the British government ordered Chinese-owned tech firm Nexperia to sell a minimum of 86 percent of Britain’s largest microchip facility, Newport Wafer Fab.

The investigation into Nexperia’s 2021 buyout of Newport Wafer Fab, presently recognized as Nexperia Newport Limited, was revealed earlier this year. The investigation followed the January implementation of legislation that allows the government to scrutinize and effectively block acquisitions and investments in critical sectors.

The law can be applied retroactively to transactions conducted after November 2020. Grant Shapps, Minister of Business, stated on Twitter that Britain welcomes international trade and investment that promotes economic growth and employment creation. However, he added, if the government uncovers a threat to national security, it will take decisive action.

Nexperia isn’t on board

The government stated that there was a national security risk associated with compound semiconductor operations at the facility and emphasized the potential for such activities to impair British capabilities.

According to the directive, the location of the facility could potentially provide access to technological talent in the South Wales area and prohibit talent from being involved in future initiatives essential to national security.

Nexperia, based in the Netherlands and owned by China’s Wingtech Technology, stated that it does not accept the explanation, adding that two earlier security investigations identified no national security issues that would justify blocking the purchase.

The government asserts the order is right

Toni Versluijs, Nexperia’s UK national manager, said that the company is “genuinely shocked”, calling the decision “wrong” and indicating the company would appeal to overturn the order.

According to the government, Nexperia increased its stake in Newport Wafer fab to 100 percent in July 2021 by acquiring a further 86 percent of the company’s share capital.

The order stated that the Secretary of State believes that the final decision is necessary and reasonable to alleviate risks to national security.

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