Chinese language takeover of largest UK chip plant blocked by authorities

The U.Ok. authorities has blocked the takeover of the nation’s largest microchip manufacturing unit by a Chinese language-owned agency over issues it could undermine nationwide safety.

Grant Shapps, minister for enterprise, vitality and industrial technique, on Wednesday ordered Dutch chipmaker Nexperia to promote its majority stake in Newport Wafer Fab, the Welsh semiconductor agency it acquired for £63 million ($75 million).

Nexperia relies within the Netherlands however owned by Wingtech, {a partially} Chinese language state-backed firm listed in Shanghai. Nexperia accomplished its acquisition of Newport Wafer Fab in 2021, and the agency subsequently modified its identify to Nexperia Newport Restricted, or NNL.

“The order has the impact of requiring Nexperia BV to promote a minimum of 86% of NNL inside a specifified interval and by following a specified course of,” the U.Ok.’s Division for Enterprise, Power and Industrial Technique stated in an announcement.

Nexperia had initially owned 14% of Newport Wafer Fab however on Jul. 5, 2021, upped its stake to 100%.

A Nexperia consultant was not instantly out there for remark when contacted by CNBC outdoors of standard enterprise hours.

Authorities officers and lawmakers expressed issues that the U.Ok. was promoting a prized asset to a Chinese language-owned firm at a time of worldwide shortages in semiconductors, that are nonetheless ongoing and anticipated to final till 2024. A nationwide safety probe into the deal was launched earlier this yr.

The British authorities stated Wednesday that the placement of the Newport facility, a part of a strategically essential cluster of semiconductor experience in Wales, was finally a nationwide safety concern.

Although not a very giant firm, Newport Wafer Fab runs Britain’s largest chipmaking facility, producing some 32,000 silicon wafers every month.

Nations are more and more in search of to claw again management of strategically essential industries equivalent to semiconductors after widespread provide chain disruptions uncovered an overreliance on China as a world manufacturing hub.

The transfer may additional bitter U.Ok.-Sino relations, that are already at a low level following strikes from London to ban Huawei 5G gear and grant individuals in Hong Kong particular British visas that might ultimately result in citizenship.

The U.Ok. has beforehand investigated Nvidia‘s acquisition of Arm, an important chip design firm, over nationwide safety issues. The acquisition was shelved by the U.S. semiconductor big in February.