LONDON, Nov 28, Britain must support its semiconductor industry to win inward buy and ensure collections of the chips essential to its industrial and economic prospects, a group of lawmakers said.
Produced by an international shortage, governments in the United States and Europe have pushed tens of billions of bucks into semiconductors, including creating new manufacturing fabs.
Britain, yet, had not issued its sworn plan on the sector and risked falling behind in securing inward investment, the lawmakers said in a report on Monday.
The UK government blocked the seizure of the nation’s largest microchip factory by a Chinese-owned firm over concerns it may undermine national security.
Grant Shapps, pastor for industry, energy, and industrial strategy, on Wednesday, ordered Dutch chipmaker Nexperia to sell its bulk stake in Newport Wafer Fab, the Welsh semiconductor firm it acquired for £63 million ($75 million).
Nexperia was founded in the Netherlands but own by Wingtech, a partially Chinese state-backed company listed in Shanghai. Nexperia finalized its purchase of Newport Wafer Fab in 2021, and the firm subsequently changed its name to Nexperia Newport Limited or NNL.
The order effect of requiring Nexperia BV to sell at least 86% of NNL within a specified period by pursuing a specified function, the United Kingdom’s Department for Business, Energy and Industrial Strategy said in a statement.
Nexperia originally owned 14% of Newport Wafer Fab, but in July 2021, it upped its stake to 100%.
We welcome foreign exchange & asset that supports growth and jobs, Shapps tweeted Wednesday. But where we identify risks to national security we will act decisively.
Toni Versluijs, Nexperia’s UK government manager, said the decision was wrong and that the company plans to appeal.
We are genuinely amazed, Versluijs said in a statement Wednesday. The decision is bad, and we will appeal to overturn this divestment order to protect the over 500 jobs at Newport.
Government officers and legislators expressed concerns that the UK was selling a prized asset to a Chinese-owned company with a global shortage in semiconductors, still ongoing and expected to last until 2024.
Britain established a federal security probe into the Nexperia deal earlier this year, using capabilities that allow it to review and block foreign takeovers or investments in sensitive sectors.
The government said Wednesday that the area of the Newport facility, which is part of a strategically important cluster of semiconductor expertise in Wales, ultimately led to the view that the takeover was a national security concern.
Though not quite a large group, Newport Wafer Fab runs Britain’s largest chipmaking facility, producing some 32,000 silicon wafers each month.
Nation increasingly seeking to claw back control of strategically important industries such as semiconductors after widespread store chain disruptions exposed an overreliance on China as a global manufacturing hub.
The action could further bad UK-Sino relations, which are already at a low point following moves from London to ban Huawei 5G tools and grant people in Hong Kong special British visas that would eventually lead to citizenship.
The UK has yet to investigate Nvidia’s acquisition of Arm, a crucial chip design company, over national security concerns. The acquisition shelves by the US semiconductor giant in February.
The Department for Digital, Culture, Media, and Sport (DCMS) is now hiring a Senior Policy Advisor for Semiconductors as part of its Economic Security Unit (alongside a similar role focused on AI and DeepTech).
The civil servant, earning up to £58,000, leads the development of the UK’s domestic sectoral strategy, requiring the government said working across Whitehall to prioritize DCMS interests on a priority topic for Government, engaging with external experts and businesses to develop HMG positions and implement them effectively requiring strong analytical rigor and excellent working relationships.
Separately, the Business, Energy, and Industrial Strategy (BEIS) Committee have launched an inquiry into the UK semiconductor strategy – or its lack of one that no single modest appointee can surmount. The committee currently calling for evidence – interested parties can submit until 14 June 2022.
It is perhaps revealing that two separate government departments – DCMS and BEIS – are somehow responsible for the UK semiconductor strategy. And while it’s DCMS that is currently hiring for a semiconductor policy advisor, it’s BEIS that has to make decisions about the UK’s semiconductor production facilities – particularly, at the moment, Newport Wafer Fab (NWF).
The South-Wales-based NWF, a maker of commodity chips and the UK’s largest semiconductor producer, has come in for international scrutiny following its takeover by Nexperia, part of Chinese firm Wingtech. Business secretary Kwasi Kwarteng is currently considering whether to force Nexperia to roll back its buyout of NWF on national security grounds.
Despite the sale of NWF being raised by US Republican congressmen as a national security issue, and anger from some British MPs, the UK’s national security advisor, Stephen Lovegrove, was reported to have approved NWF’s takeover by Nexperia. Days later though, the Foreign Affairs Committee said Lovegrove’s review appeared not to have started.