UK reviews sale of its largest semiconductor chip maker

Boris Johnson has asked Sir Stephen Lovegrove into the purchase of Newport Water Fab by the Dutch company, Nexperia and says the UK has to judge whether the products they are making are of ‘real intellectual property value’ and interest to China and if there were real security implications. However, he added he did not want an “anti-China spirit” which could “lead us to pitchfork away every investment from the country”.

He revealed the intervention as he was questioned by members of a parliamentary committee on Wednesday. Nexperia had announced on Monday it had completed its takeover of NWF in a deal which it said would secure jobs at the south Wales site.

Global shortage of semiconductor chips

The acquisition announcement comes at a time when shortages of semiconductor chip supplies are hampering businesses across the world, with car manufacturers and retailers being hit particularly hard by the shortage.

One Conservative MP, Tom Tugendhat had told Johnson that he thought we were looking at a Chinese state-backed entity buying a semiconductor manufacturer at a time of global shortage, when Beijing is already looking to stockpile the technology. Johnson went on to say the Welsh government had asked Whitehall to ‘deal with it’ - although this has been denied by Mark Drakeford’s administration in Cardiff.

National security concerns and implications

Earlier this year, the government also intervened in the planned £29 billion sale of the UK-based chip maker Arm Holdings by its current Japanese owner to America’s Nvidia and asked regulators to report on any national security implications. Meanwhile, the concerns over Chinese involvement in key parts of other countries’ economies have grown over the last couple of years, both in Britain and the US.

And last year the UK government reversed its policy on telecoms firm Huawei's involvement in the roll-out of Britain’s 5G infrastructure, announcing that its equipment must be stripped out of the network by 2027.