GOOD MORNING FROM LONDON
The FT reports today that Newport Wafer Fab (NWC) Is one of the four main companies that make up the Welsh semiconductor “cluster”, alongside IQE, SPTS Technologies and Microchip making components for electric vehicles and smartphones. A decision by the UK Government is on hold whether to allow the acquisition of Britain’s largest semiconductor plant by a Chinese company, Nexperia, a Dutch subsidiary of Chinese company Wingtec. The move comes despite the head of the company publicly calling on Tuesday for a rapid decision to end the cloud of uncertainty hanging over it.
Since Johnson became UK prime minister in 2019, his government has reversed plans to allow Chinese telecoms equipment maker Huawei to supply kit for Britain’s 5G phone networks. He has also intervened to block an investor linked to Beijing from taking control of the board of Imagination Technologies, a British chip designer.
The UK Business Secretary Kwarteng announced in May that he was calling in the acquisition under the new National Security and Investment (NSI) Act which came into force on January 4 this year, + allows greater scrutiny of foreign takeovers of companies in sensitive industries.
Kwarteng intervened despite the fact that in March the Government’s National Security adviser, Stephen Lovegrove, had found insufficient reasons to cancel the purchase on specific security grounds, given the company’s outdated technology.
NWC’s CEO, Versluijs, said his company had invested tens of millions of pounds in its plants in Newport and Manchester + rejected rumours that the company was planning to shift production abroad. “We have invested big time in Manchester and Newport,” he said. “We are here to stay. We want to work in the local ecosystem and enable the local ecosystem and the UK semiconductor industry to be successful.”
Again, there is an overarching Geo-Political Issue at work. Should the UK Government follow the US + “de-couple” from China in an attempt to restrain China’s inevitable advance or should the UK Government seek to benefit the UK economy and increase its trade + business relations with China?