(Nexperia), a subsidiary of China’s $100 billion semiconductor giant Wintel Technology, is in intensive talks with Newport Wafer Fab (NWF), the UK’s largest chipmaker, to acquire the company, and it may soon formally announced the acquisition.
Located in Newport, South Wales, Newport Wafer Fab is one of the largest and one of the few semiconductor chip manufacturers in the United Kingdom. The U.S. Consumer News and Business Channel (CNBC) first reported the news when it interviewed a spokesman for Ensyn Semiconductor. The spokesperson confirmed to CNBC that “we are in constructive dialogue with Newport Wafer Manufacturing and the Welsh government about the future of the company” and that “we cannot comment further until we reach a conclusion”.
While negotiations are still underway, sources revealed the purchase price is about £63 million (about $87 million). The acquisition talks come at a time when the global automotive chip shortage is severe and the automotive chip industry is facing serious capacity problems. It is understood that Newport Wafer Manufacturing specializes in the production of silicon chips used in the automotive industry power components, the company is also developing faster, more energy-efficient “compound semiconductor”.
The acquisition talks are also taking place at a time when U.S.-China and U.K.-China relations are deteriorating and the U.S. is trying to impose a complete blockade on China in the semiconductor industry, making it particularly notable. According to several media reports, even if the commercial negotiations on the acquisition are successfully completed, the British government may still step in to block the acquisition, either on its own or under pressure from the United States.
Tom Tugendhat, head of the British government’s China Study Group and chairman of the Foreign Affairs Select Committee, sent a letter last month to British Business Secretary Kwasi Kwarteng warning of a potential takeover of a British semiconductor manufacturer by a Chinese company: “The UK’s leading 200mm semiconductor technology development and processing facility is being undermined by a Chinese company. The takeover of the UK’s leading 200mm semiconductor technology development and processing facility by a Chinese entity would represent a major economic and national security issue. He called on the British government to review the acquisition under the National Security and Investment Act, which came into force in April this year.
CNBC has quoted a British government spokesman as saying, “We are aware that Ansett Semiconductor will acquire Newport Wafer Manufacturing. We do not think it is appropriate to intervene at this time, but we will continue to monitor the situation closely and will not hesitate to use the rights granted to us under the Enterprise Act in case the situation changes.
Sources familiar with the matter told the media that although the price of the acquisition of Newport Wafer Manufacturing by Ansett Semiconductor is not high, the latter has several debts may also be packaged. Newport wafer fabrication company’s debts include 20 million pounds owed to HSBC (about $ 27.64 million) and 18 million pounds owed to the Welsh government (about $ 24.88 million). In addition, four years ago from Germany Infineon (Infineon Technologies) to buy Newport wafer manufacturing company and become its majority shareholder of the CEO Drew ∙ Nelson (Drew Nelson) will also receive about 15 million pounds (about $ 20.73 million) payment after the completion of the acquisition.
Some analysts believe that the British government can certainly step in and legally stop the acquisition, but Newport Wafer Manufacturing’s debt crisis but no one can help solve it, it owes HSBC and the Welsh government may not be able to repay the huge sums.
In a competitive environment between the U.S. and China, Chinese companies have been trying to invest more to change the so-called “necking” they experience in some industries. The semiconductor industry is an area where both the Chinese government and companies are investing more. In April, Wentech announced it would invest 12 billion yuan ($1.7 billion) to build a 12-inch fab in Shanghai to produce power chips and wafers for electric vehicles, among other devices. The fab is expected to be operational in July next year with an annual capacity of 400,000 wafers.
Last month, Ansys Semiconductor also announced an expansion plan to invest $700 million over the next 12 to 15 months to expand its European fabs, Asian packaging and testing centers and global R&D sites. The company also announced the launch of a new 8-inch wafer production line in Manchester, England.
The vast majority of the world’s semiconductor chips are currently manufactured in Asia, with Taiwan’s TSMC and South Korea’s Samsung sought after by peers and customers for their leading-edge manufacturing processes.