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Newport Wafer Fab: Anger in Beijing as UK forces Chinese tech firm to sell controlling stake

Authorities in Beijing have reacted with anger after the UK forced a Chinese-owned tech firm to draw down its ownership of Britain’s largest microchip factory.

A Chinese foreign ministry spokesperson said it resolutely opposed the ruling, by business secretary Grant Shapps on Wednesday, that Nexperia must sell at least 86% of its interest in Newport Wafer Fab.

The decision was made on national security grounds following an assessment that was ordered by former chancellor Kwasi Kwarteng when he had earlier held the business brief.

Nexperia responded by dismissing the UK government’s concerns, warning that 500 jobs had been placed at risk as a result and it planned to challenge the ruling.

The ministry briefing for reporters in the Chinese capital on Friday was told: “The British side should earnestly respect the legitimate rights and interests of Chinese enterprises, and provide a fair and non-discriminatory business environment for enterprises of all countries.”

A UK government spokesperson said of the ruling on Wednesday: “Following a detailed national security assessment, the business secretary has decided to issue a Final Order requiring Nexperia to sell at least 86% of Newport Wafer Fab to prevent against potential national security risks.

“The National Security and Investment regime enables us to continue championing business and open investment, whilst protecting national security.

“The UK has a number of strengths within the semiconductor sector, including in South Wales, and through our forthcoming semiconductor strategy we will enable this technology to continue to support the UK and global economy.”

Newport Wafer Fab, on the outskirts of Newport, is the biggest producer of semiconductors in the UK.

The Nexperia plant in Newport, Wales
Image:
The plant is located outside Newport

Nexperia had a 14% holding in the plant before its purchase was completed, for a reported £63m, in 2021.

Its products are not the crucial microchip brains behind top electronics such as smartphones but transistor-style chips which are commonly found in things like charging cables and hairdryers.

Nexperia, which is Chinese owned but based in the Netherlands, responded “The far-reaching remedies which Nexperia offered to fully address the government’s concerns have been entirely ignored.

“The UK government chose not to enter into a meaningful dialogue with Nexperia or even visit the Newport site.

“More than 500 employees in Newport also raised their own significant concerns about such a divestment – the government has chosen not to listen to them and instead taken this decision which puts the livelihoods of them and their families, as well as more than £100m of taxpayers’ money, completely unnecessarily at risk.”


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