Nexperia engages broker to sell Newport wafer fab

Business news | April 23, 2023

By Peter Clarke

Chinese-owned Nexperia BV has asked ATREG Inc. to help it sell its wafer fab in Newport, Wales, in compliance with UK government instructions.

Nexperia acquired the fab in July 2021 in a hostile takeover (see China’s Nexperia buys Newport Wafer Fab amid concerns) but the deal came under investigation by the UK government a year later on national security grounds. The authorities ruled in November 2022 that Nexperia should sell off at least 86 percent of its stake in the Welsh fab. Nexperia has sought a judicial review of the decision (see Nexperia argues forced sale would close Newport fab).

In its 1Q23 newsletter ATREG said it “looks forward to working with Nexperia regarding its operational, automotive-qualified 200mm manufacturing facility located in Newport, South Wales, which is the UK’s largest semiconductor site spanning 28 acres (12 hectares).”

Sales specification

In the newsletter ATREG provided some details of the fab campus: a ballroom cleanroom facility built in 1998 suitable for 200mm-diameter wafers, with accompanying test area. The site also includes a 150mm wafer modular cleanroom. “With proper investments, the site can also be used for production of compound semiconductors,” ATREG said.

ATREG has extensive global experience of arranging fab sales. In Europe it previously brokered the sale of a Texas Instruments wafer fab in Greenock, Scotland, to Diodes Inc. in 2019 (see Diodes buys TI’s Scottish fab) and the transfer of an OnSemi wafer fab in Oudenaarde, Belgium to a startup company (see Belgian wafer fab sold to GaN startup with China connections).

The fact that ATREG has been engaged does not mean a sale is necessarily imminent and Nexperia could still be pursuing is judicial review of the UK government’s decision. As an indication of potential timescales, the Greenock fab’s closure was announced in 2016 before being sold as a going concern in 2019. Similarly, OnSemi put the Oudenaarde fab up for sale in 2020 before making a deal in 2022.

However, the Newport wafer fab is part of a South Wales cluster of excellence in compound semiconductors. Several private equity groups were reported to be interested in an acquisition once the sale became a possibility. One such is Palladian Investment Partners LLC. Atlantic Bridge, the Irish venture capital firm, was also said to be interested in taking a stake in the wafer fab, if Nexperia is compelled to sell. Headlight Technology Partners Ltd. is fund that was reportedly in talks to raise £500 million (about €590 million or US$590 million) for use across multiple investments including, potentially, the Newport fab (see Technology fund formed for Newport Wafer Fab rescue bid).

In a statement Nexperia said it remains committed to the judicial review process and still strongly disagrees with the UK government’s November 2022 divestment order, not accepting any of the national security concerns raised.

A Welsh Government spokesperson said: “Our priority is to safeguard the future of the hundreds of highly skilled jobs in Newport. We remain fully committed to ensuring the continued development of our compound semiconductor cluster in south east Wales, and the role it plays on a wider UK scale. In light of the decision taken by UK Government following a security review, UK Ministers clearly view the internationally-recognised compound semiconductor sector in Wales as a strategic national asset. We therefore call again on the UK Government to publish its long-awaited semiconductor strategy and to invest in the sector to safeguard its future.”