Wafer Fab: UK Government accused of 'chaotic' handling of Newport microchip factory sale

WS050422 NEWPORT WAFER FAB HERO

The UK Government’s “chaotic” decision to overturn a Chinese-backed takeover of a Newport microchip factory will put at risk the livelihoods of nearly 600 people, according to a Welsh MP.

But the Business Secretary defended the decision, saying that “national security has to be the number one concern” 

The semiconductor factory which used to be known as Newport Wafer Fab was bought by the Netherlands-based company Nexperia in July 2021.

Nexperia is in turn owned by the Chinese company Wingtech. Concerns about national security were raised in the wake of the sale and the UK Government held a review under relatively new powers introduced by the National Security and Investment Act 2021. 

The UK Government has told a Chinese-owned company that it must sell a factory in Newport that it acquired last year.

Last week the UK Government Business Secretary Grant Shapps issued a Final Order Notice under the Act which means the company must sell the shares it holds in the factory. 

In the House of Commons, the Labour MP for Newport West raised her concerns about the latest action after being granted an Urgent Question. 

She told MPs that “Nearly 600 people with just one month to Christmas have had the most unacceptable shock and worry heaped on them by this Government.

“We have heard so much about a commitment to levelling up but this decision made by Tory ministers is a disgraceful exercise in levelling down Newport West and South Wales.

“I am concerned that ministers have chosen not to listen to my constituents and instead taken a decision that now puts their livelihoods and their families, as well as more than £100 million of taxpayers’ money, completely and unnecessarily at risk.”

Ms Jones also called on the Business Secretary to publish the security assessment behind the decision. 

Mr Shapps acknowledged it was a “concerning time for 500 or so employees” at Newport Wafer Fab.

But in response to Ruth Jones he said that, “She is not privy to the information that I have had to weigh up in order to come to this national security decision, which I have done with the utmost diligence and taken all of the factors into account.

“Nor can I am afraid accede to her request to publish that information.”

Mr Shapps had earlier told the Commons he was “unable to go into further detail about the national security assessments and implications which have formed this decision”.

But the Business Secretary did summarise what the final order means, telling MPs: “What I can say is the final order requires Nexperia to follow a set process leading to divestment within a specified period.”