Britain’s biggest microchip factory is likely to be closed and production moved to Shanghai if ministers authorize a Chinese takeover of the company, a report has warned.
Researchers at the Policy Exchange think tank said there was a ‘strong possibility’ that Newport Wafer Fab’s new owner, Nexperia, would seek to move the company’s facilities out of the South Country in the future. Wales.
This risks strengthening China’s stranglehold on the global semiconductor market, said the think tank, which has suffered huge disruption due to the country’s strict zero-Covid policy and subsequent lockdowns.
Semiconductors are a crucial component of electrical devices such as smartphones and televisions, and are essential in automotive construction.
The Policy Exchange said Kwasi Kwarteng, the business secretary, should consider those implications when deciding whether to cancel the deal, they said, alongside US concerns and military applications of the technology. ‘company.
The researchers said: “There is a strong possibility that when Wingtech’s Shanghai plant reaches full capacity, the company will close Newport and shift production to China, supporting China’s drive to reduce imports of semi- drivers.
Nexperia, which is owned by Shanghai-listed Wingtech, called suggestions to relocate Newport Wafer Fab production overseas “nonsense”.
A spokesperson said: “This is complete nonsense. There is no factual basis for such idle guesswork. In addition to acquiring the Newport Wafer Fab site, repaying a $17 million loan to the Welsh Government, Nexperia has committed a further investment of £160 million to its UK business over the past year to help meet strong global demand for semiconductors.
“This investment has secured the 450 high-value manufacturing jobs in Newport, with another 50 people already hired, as well as the 1,000 at our Manchester site.
“These are not shares of a company that is about to close shop.”
The £63million takeover of Newport Wafer Fab was announced last year but prompted a furious backlash from MPs amid concerns over growing Chinese ownership of technology assets around the world.
Mr Kwarteng announced a national security review of the takeover in May, but a decision was delayed amid a Cabinet split over the issue.
The plant struggled financially during the pandemic, allowing Dutch company Nexperia, which owned 14% of Newport Wafer Fab, to exercise an option to buy.
Ministers initially approved the deal, but Mr Kwarteng later ordered a detailed review under new national security legislation.
The laws give him the power to reverse the takeover once an investigation has been conducted.
Calls to block the takeover have grown amid a global chip shortage and growing concerns over China’s technological ambitions.
A group of US congressmen have urged Joe Biden to intervene if the takeover is not reversed, saying the UK should be removed from a security whitelist that allows British investment in America to avoid filtering.
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This notice was published: 2022-06-27 05:00:00