UK government to investigate Chinese acquisition of semiconductor firm

The UK government is to investigate a Chinese firm's acquisition of a UK producer of semiconductors on national security grounds. The move follows Shanghai-based Wingtech's announcement on 6 July that its Dutch subsidiary had acquired 100% ownership in Welsh company Newport Wafer Fab (NWF).

UK Prime Minister Boris Johnson revealed plans to investigate the acquisition at a UK parliamentary select committee on 7 July. “We are looking into it [the acquisition],” said Johnson. “We have to judge whether the stuff that they are making is of real intellectual property value and interest to China, whether there are real security implications. I have asked the national security adviser to look at it.”

Wingtech's acquisition of NWF was channelled through Nijmegen-based Nexperia, which produces a wide range of electrical components, with the aim to “boost global production capacity”, said Wingtech. Following the transaction, which is valued at about GBP63 million (USD87 million), NWF is to be renamed Nexperia Newport. Nexperia already operates a production facility in Manchester.

Wingtech is listed on the Shanghai Stock Exchange and is reported to have strong investment links with the Chinese government. The company's main business areas include semiconductors, optical modules, communication terminals, servers, and Internet of Things technologies.

The United Kingdom's grounds for reviewing Wingtech's takeover of NWF is framed by legislation proposed in November 2020 and enacted in April 2021.

The National Security and Investment Act 2021, which updated the powers previously contained in the Enterprise Act of 2002, extends the government's powers to block inward investment on national security grounds across 17 sectors including defence, artificial intelligence, computing hardware, advanced materials, quantum technologies, engineering biology, military or dual-use technologies, and satellite systems and space technologies.

Janes