Ministers mull bailout of chipmaker Newport Wafer Fab
The government is considering a taxpayer bailout of British chipmaker Newport Wafer Fab if its sale to a Chinese-owned firm is overturned on national security grounds.
Business secretary Kwasi Kwarteng announced this week that he was using new powers in the National Security Act to review the sale of the Wales-based firm by Wingtech subsidiary Nexperia.
The £63m sale of the British chipmaker was completed last year, however the government has new powers in the National Security Act to retroactively overturn company purchases.
The Sunday Telegraph reports that an American consortium is preparing to make an offer for Newport Wafer Fab and that they are in talks with the government’s £1bn Automotive Transformation Fund.
The money would reportedly be given to the consortium as grant funding and the government would not receive an equity share in the firm.
The Automotive Transformation Fund was created last year to provide funding for electric vehicles and infrastructure.
It is believed that Newport Wafer Fab has the potential to create chips that could result in more efficient electric vehicle charging infrastructure.
Kwarteng’s review, under the new law, will take 30 days with an option to extend the probe by an extra 45 days.
Several high profile Tory MPs, including Foreign Affairs Committee chair Tom Tugendhat, have previously called on the government to block the sale to Nexperia on national security grounds.
The firm has several defence contracts with the British government, sparking concerns that the Chinese government could use this as a foothold for intelligence gathering and espionage – claims denied by Nexperia.
The Department for Business, Energy and Industrial Strategy was contacted for comment.