UK government orders investigation into Chinese takeover of UK semiconductor plant

The acquisition of Newport Wafer Fab (NWF), the largest chipmaker in the United Kingdom, by Chinese semiconductor giant Wingtech’s (Nexperia) Ansei Semiconductor (China) Ltd (Nexperia) is likely to change, as the British government, which previously said it was “not appropriate to intervene at this time,” has changed its attitude. “the British government’s attitude has changed.

Prime Minister Boris Johnson, questioned by lawmakers in Parliament, said his national security adviser, Sir Stephen Lovegrove, would investigate the 63 million pound ($87 million) takeover.

According to the BBC, Johnson had previously tasked the UK’s National Security Agency (NSA) with conducting a security assessment of the Ansett acquisition, but when questioned by several lawmakers, he said he was willing to let the national security adviser investigate the acquisition again.

Newport Wafer Manufacturing, located in Newport, South Wales, is one of the largest and one of the few semiconductor chip manufacturers in the United Kingdom. Although headquartered in the Netherlands, Ansys Semiconductor is a wholly owned subsidiary of China’s $100 billion semiconductor giant, Wintel Technology.

The acquisition by Ensyn, a Chinese-owned company targeting the UK’s Newport wafer fabrication company, is particularly notable as it comes at a time when US-China and UK-China relations are deteriorating across the board and the US wants to impose a complete blockade on China in the semiconductor industry. In addition, the acquisition talks are taking place at a time when there is a severe global shortage of automotive chips and the automotive chip industry is facing serious capacity problems. It is understood that Newport Wafer Manufacturing specializes in the production of silicon chips for power components in the automotive industry, the company is also developing faster, more energy-efficient “compound semiconductors.

Johnson said during parliamentary questioning: “There is such a company in Newport, and we have to find out whether the movements produced there are really of intellectual property of interest to China and whether there are really security risks. I have asked the national security adviser to launch an investigation.”

But Johnson also said:- “I don’t want anti-China sentiment to mislead us into ruling out all investment coming to Britain from China, it would be economically foolish to do so.”

Johnson’s statement was seen as an effort to maintain some balance between calls from the U.S. and British political circles for a complete decoupling from China and the desire of domestic businessmen to maintain and expand economic and trade exchanges with China after Britain’s exit from the European Union.

But Tom Tugendhat, chairman of the British Parliament’s Foreign Affairs Committee and chairman of the China Study Group, who is a “hawk” on China, expressed concern that the Johnson administration did not review the Chinese acquisition in the first instance under the National Security and Investment Act. Tom Tugendhat, chairman of the Parliamentary Foreign Affairs Committee and chairman of the China Study Group, expressed alarm that the Johnson administration did not first review the Chinese acquisition under the National Security and Investment Act.

In an interview with the BBC, Tugendhat said that during the summit of the Group of Seven major industrial nations in the United Kingdom, the leaders’ joint declaration clearly expressed their desire to strengthen the security of global supply chains, especially for industrial goods such as semiconductors. And allowing Chinese companies to acquire semiconductor plants is “a blatant violation of the G7 summit commitments.

Tugenhardt also tweeted, “Boris Johnson’s decision to review the acquisition of the UK’s largest semiconductor plant at a time of chip shortages and hoarding was a good one.”

A British businessman, who did not want to be identified, said in an interview with the BBC that he believes there are three reasons why the Johnson administration is keeping a low profile in the process of Chinese acquisition of British fabs. First, the 200mm wafers produced by the Newport fab, although the market demand is not small, in fact, in the international semiconductor industry already belongs to the obsolete “old technology”; second, the Newport fab, although the process is still excellent, but the manufacturer is heavily indebted, owed to the Welsh government and the British HSBC Bank a total of nearly 40 million pounds (about $ 552.8 billion). 552.8 billion U.S. dollars), if the company goes bankrupt, it will affect more than 400 relatively well-paying jobs; third, the British government is not willing to tear up with Beijing for a company that does not involve really sensitive technology.