Major UK Semiconductor Firm Sold at 'Bargain Price' to Chinese Capital... "Serious National Security Threat"

Newport Wafer Fab Sold to Nexperia for 98.7 Billion KRW

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Nexperia, a Dutch semiconductor company owned by China's Wingtech, is acquiring Newport Wafer Fab (NWF), the largest semiconductor company in the UK. This symbolic event of a global major semiconductor company falling under Chinese capital has raised concerns within the UK about the leakage of semiconductor technology, which is classified as a national security issue.

According to CNBC on the 5th (local time), Nexperia announced plans to acquire the UK’s NWF. Nexperia had already become the second-largest shareholder of NWF through a stake acquisition in 2019. Although the exact additional amount paid by Nexperia for this merger was not disclosed, CNBC cited sources indicating that approximately ?63 million (about 98.7 billion KRW) was invested.

Although Nexperia is based in the Netherlands, it is classified as a Chinese company because Wingtech, a Chinese mobile device manufacturer, owns 100% of its shares. NWF is a non-listed company located in Newport, South Wales, UK, and is one of the few semiconductor foundry companies in the UK.

Amid the ongoing global semiconductor supply shortage, Nexperia expects to meet the increased semiconductor demand through this merger. Achille Kempe, Nexperia’s Chief Operating Officer (COO), stated in a press release, "NWF has a team equipped with advanced technology," and added, "We look forward to pioneering the future together with them."

This merger comes as Western countries including the UK and the US are trying to curb China’s technological rise, raising concerns that core technologies directly related to national security may fall into Chinese hands. Tom Tugendhat, leader of the China Research Group within the UK’s ruling Conservative Party and chair of the House of Commons Foreign Affairs Select Committee, wrote in a letter to the Department for Business, Energy and Industrial Strategy, "NWF leads the UK semiconductor industry in terms of 200mm silicon and semiconductor technology development and processing facilities," and warned, "If it falls under Chinese capital, it poses a serious economic and national security threat."

Previously, while the UK political sphere initiated an investigation by competition authorities into Nvidia’s acquisition of ARM in the US, there has been controversy over the lack of intervention regarding Nexperia’s acquisition of NWF.

There are also controversies over the undervalued sale of NWF. Glen O'Donnell, an analyst at market research firm Forrester, criticized, "?63 million is an absurdly low price for a wafer fab company," and added, "Even if NWF’s technology is outdated, this price is unreasonable."

This content was produced with the assistance of AI translation services.