China’s Nexperia buys Newport Wafer Fab amid concerns

China’s Nexperia buys Newport Wafer Fab amid concerns

Business news |
By Peter Clarke

Although Nexperia has not revealed the sum paid or how the deal was constructed, it was for $87 million (about £63 million), according to reports. Newport Wafer Fab is capable of making power and compound semiconductor ICs on 200mm-diameter wafers.

There may be the opportunity for continued UK-owned production in an empty building on the campus, reports also indicated.

Many have opposed the Chinese deal with the company’s board of directors even writing to the UK’s Business Secretary Kwasi Karteng seeking protection from the takeover, but the UK has declined to act so far. This is despite the fact that Newport Wafer Fab (NWF) is the focus of a cluster of excellence in compound semiconductors and takepayers’ money has been spent on developing process technologies such as gallium-nitride-on-silicon (see UK government helps NWF develop GaN foundry process).

Meanwhile Newport Wafer Fab has become Nexperia Newport as Nexperia has announced it has completed the transaction to acquire Newport Wafer Fab.

Nexperia is a customer of the foundry services offered by Newport Wafer Fab and became its second largest shareholder in 2019. When NWF failed to meet certain conditions of its supply contract Nexperia exercised the right to appoint board directors which it exercised. They in turn were able to affect the next steps for the company.

Nexperia said that Nexperia Newport will continue to have a strong position in the Welsh ecosystem and technology development and will secure the current jobs at the Newport site and others across the region.

“The acquisition is great news for the staff here in Newport and the wider business community in the region as Nexperia is providing much-needed investment and stability for the future,” said Paul James, operations director at the Newport site, in a statement issued by Nexperia.

Next: Technology heading to China?

The expectation is that Nexperia/Wingtech will now take the GaN-on-Si process that is manufactured at NWF and move it to a 300mm wafer fab that is being funded by the Chinse government. Wingtech announced in April that it planned to invest $1.8 billion to build a wafer fab for power semiconductors in Shanghai as part of a national plan to localize the production of components for electric vehicles.

With the shortages in semiconductor supply the world is currently experiencing, particularly in automotive components, it would seem that the short-term future of the Newport facility is assured.

The reports state that Drew Nelson, formerly CEO of IQE plc (see IQE boss to step down) and outgoing chairman of Newport Wafer Fab will spin off the compound semiconductor part of NWF and create a new venture and will be permitted to keep the Newport Wafer Fab name.

NWF’s current manufacturing capacity is more than 35,000 200mm wafer starts per month and will complement investments at Nexperia’s Manchester and Hamburg wafer fabs. The acquisition significantly enhances the automotive-qualified product supply capability and the market share of Nexperia, the company said.

It remains to be seen whether the UK government will try to block the deal or whether that opportunity has passed.

In June, Tom Tugendhat, chairman of the UK government’s Foreign Affairs Select Committee wrote to UK Business Minister Kwasi Kwarteng asking for any deal to be reviewed under the National Security and Investment Act. He wrote: “I must stress again that having the U.K.’s leading 200mm silicon and semiconductor technology development and processing facility being taken over by a Chinese entity – in my view – represents a significant economic and national security concern.”

Related links and articles:

News articles:

Newport Wafer Fab under threat of Chinese takeover

UK government helps NWF develop GaN foundry process

Opinion: Is the West still blind to China’s ‘buy-the-tech’ strategy?

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