UK Investigates Acquisition of UK's Largest Semiconductor Company by UK and China Over "National Security Concerns"

Investigation into Nexperia's Acquisition of Newport Wafer Fab Owned by Chinese Capital

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] The UK government has decided to investigate the acquisition of the UK's largest semiconductor company by Chinese capital. As the technological hegemony competition between China and Western countries intensifies, it is analyzed that the UK is taking measures against Chinese companies to prevent the leakage of its semiconductor technology.

On the 7th (local time), Bloomberg reported that the UK government is investigating the acquisition of Newport Wafer Fab (NWF), a UK semiconductor company, by Nexperia, a Dutch semiconductor company owned by China's Wingtech.

UK Prime Minister Boris Johnson appeared before Parliament the day before and said, "We are looking into this matter," adding, "We will investigate whether the acquisition by a Chinese-affiliated company could pose a substantial security issue for our country."

Earlier, Nexperia announced on the 5th that it would acquire NWF. NWF is a privately held company located in Newport, South Wales, UK, and is one of the few semiconductor foundry companies in the UK.

Although Nexperia is based in the Netherlands, it is effectively classified as a Chinese company because Wingtech, a Chinese mobile device manufacturer, owns 100% of its shares. Nexperia stated that it proceeded with the acquisition of NWF to enter the foundry business in response to the increasing demand for semiconductors.

In response to Nexperia's acquisition, concerns about the leakage of domestic semiconductor technology have been raised within the UK, with calls for the UK government to actively block the acquisition.

Ian Duncan Smith, former leader of the Conservative Party, strongly criticized, saying, "The government should reject this merger and acquisition," and called the sale of NWF a disaster.

In particular, amid the ongoing semiconductor supply shortage and China's declaration of a 'semiconductor rise,' competition for technological hegemony with Western countries is intensifying, making the securing of a stable semiconductor supply chain a key issue. Accordingly, it is analyzed that the UK cannot help but be sensitive to foreign capital's acquisition of semiconductor companies.

Previously, in the UK, concerns about weakening the semiconductor supply chain have been continuously raised as domestic semiconductor design companies ARM and Imagination Technologies were sold to Japanese and Chinese capital, respectively.

In response, the UK Parliament passed a bill earlier this year allowing the UK government to investigate and reject mergers and acquisitions by foreign capital if deemed a threat to national security. According to the bill, the UK government can investigate mergers and acquisitions for up to five years.

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