The Newport Wafer Fab factory, located in South Wales, could be forced to relocate if the transfer to Chinese buyers is not reversed, a report finds. Nexperia, a subsidiary of Chinese technology company Wingtech, technically acquired the plant last year. But in January, Business Secretary Kwasi Kwarteng was granted the authority to intervene in the sale, and he is reportedly still mulling over the decision.
Under the National Security and Investment Act, he may be able to block the sale for security reasons.
Researchers at the Policy Exchange think tank have warned Mr. Kwarteng that if he doesn’t do this, Nexperia will likely try to move the factory out of Britain.
The plant produces semiconductors, a critical component of a wide variety of electronic goods, from smartphones to TVs and cars.
And amid a global semiconductor shortage, the think tank warned it could be part of China’s strategy to reduce the need for semiconductor imports.
Policy Exchange researchers said: “There is a high probability that when Wingtech’s factory in Shanghai reaches full capacity, the company would close Newport and move production to China, supporting China’s drive to reduce semiconductor imports.” .”
Kwarteng, which launched a security investigation in March, was already under heavy pressure from MPs to block the sale.
Lord Alton, a crossbench colleague, said in April: “I put a question in Parliament today as to why UK ministers have quietly approved this takeover of China’s microchip factory.
“As we have seen with telecoms and nuclear power, it is insane to sell vital British interests to companies in hostile states.”
Former Conservative Party leader Iain Duncan Smith told Politico: “If the government goes down this road, it will be yet another step in the pathetic process of appeasing China, which currently supports Russia and plans to a direct and deliberate threat to Western access to microchips and other key components for electronic equipment.”
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“In addition to acquiring the Newport Wafer Fab site and repaying a £17m loan to the Government of Wales, Nexperia has pledged a further £160m in new investment in its UK operations over the past year, to help respond strong global demand for semiconductors.
“This investment has secured 450 high-quality manufacturing jobs in Newport, with a further 50 already hired, as well as the 1,000 at our Manchester site.
“Those are not the actions of a company that is about to close.”
And while Mr Kwarteng launched a safety assessment in May, the cabinet is reportedly divided on the issue.