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UK launches national security probe of Chinese purchase of Welsh chip plant

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UK Microchip Company Newport Wafer Fab Sold To China
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 UK has today launched a national security review of a Chinese takeover of a key Welsh semiconductor plant.

Business secretary Kwasi Kwarteng said the government had “called in” the purchase of Newport Wafer Fab by Nexperia, a subsidiary of Chinese firm Wingtech Technology, with the review to be completed in 30 working days.

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.

Several high profile Tory MPs, including Foreign Affairs Committee chair Tom Tugendhat, have previously called on the government to block the sale 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.

Kwarteng said: “There will now be a full assessment under the new National Security and Investment Act. We welcome overseas investment, but it must not threaten Britain’s national security.”

It comes after Westminster’s Business, Energy and Industrial Strategy (Beis) Committee also launched its own probe into the Newport Wafer Fab sale.

The Labour chair of the committee Darren Jones said: “We’ll be considering the government’s assessment of the acquisition of Newport Wafer Fab and how this fits into the wider semiconductor supply chain in the UK.”

A Nexperia spokesperson said: “We have been informed of the Secretary of State’s decision. We welcome this opportunity to engage and contribute to an informed debate about our UK activities and investment plans.”

This is not the first intervention from Kwarteng into proposed takeovers this month, with the Business Secretary also instructing the Competition and Markets Authority (CMA) to carry out a national security investigation into the planned acquisition of Perpetuus Group.