Nexperia acquisition of Newport Wafer Fab calls into question UK’s tech strategy

China-owned semiconductor company Nexperia has acquired full ownership of the UK’s largest chip manufacturer and yet Huawei was banned from its 5G networks for being Chinese.

Nexperia is based in the Netherlands, having been spun out from NXP, which itself was once part of Phillips. However it was sold to Chinese state-owned investment firm Jianguang and Chinese private-equity firm Wise Road Capital (which seems to have been created for that purpose) in 2016 and is now owned by Chinese component-maker Wingtech.

“We are very excited to include Newport as part of our global manufacturing footprint,” said Achim Kempe, Nexperia’s COO. “Nexperia has ambitious growth plans and adding Newport supports the growing global demand for semiconductors. The Newport facility has a very skilled operational team and has a crucial role to play to ensure continuity of operations. We look forward to building a future together.”

“The acquisition is great news for the staff here in Newport and the wider business community in the region as Nexperia is providing much-needed investment and stability for the future,” said Paul James, MD of the Newport site. “We are looking forward to becoming part of the global Nexperia team and are keen to keep the current workforce. Additional local resources may be required too. We are also pleased that we will be able continue to contribute to the local ecosystem.”

“The change in ownership of the Newport site marks an important step for the future of the facility as well as for the region,” said Drew Nelson, departing chairman of the site. “We are pleased that we are able to maintain the expertise in developing high end silicon devices in the 200 mm wafer fab while at the same time opening up opportunities for us to add new semiconductor technologies.”

It’s hard to argue with any of that. We welcome foreign direct investment most of the time and if this move results in more jobs then what’s not to like? However, the UK is also a country that has gone out of its way to exclude Huawei from its 5G networks on the basis of broad security concerns that amount to it being worried about the relationship between a Chinese company and its government.

There is no evidence to suggest Nexperia’s acquisition of this fab presents any kind of additional security threat, but then again very little was presented to support the Huawei ban. Additionally Tugendhat refers to talk during the recent UK-hosted G7, after which the US formed a special club apparently designed to further isolate China in the global tech trade. This move makes the UK’s policy towards China’s involvement in its tech sector seem incoherent and it would be interesting to know what US politicians think of it.