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Nexperia forced to sell Newport Wafer Fab stake

Business news |
By Nick Flaherty


The row over the ownership of Newport Wafer Fab has exploded as the UK government is to force a sale.

Current owner Nexperia has been told to sell an 86% stake in the power fab in South Wales by the UK government over security concerns. Toni Versluijs, UK Country Manager for Nexperia, said he was shocked at the decision and that the UK government had not even visited the site.

Nexperia is owned by Wingtech of China, which an official report said had links to the Chinese government and which Nexperia denies. It points out that the acquisition was cleared by two previous security reviews and does not accept the national security concerns raised.

It said it had offered far-reaching remedies that had been “entirely ignored”. “The UK Government chose not to enter into a meaningful dialogue with Nexperia or even visit the Newport site,” it said. 

The order specifies that the company divest 86% within a specified time and with a specified process, indicating that it will have a say in who buys the stake.

“Nexperia will now challenge the order and will do everything possible to keep the factory and protect its employees in South Wales,” said the company.

Nexperia is using the fab to produce silicon power devices, but the site had previously developed compound semiconductors for sensitive applications such as radar with government grants.

Nexperia said these grants had been repaid and that it had offered not to conduct the compound semiconductor activities of potential concern and to provide the UK Government with direct control and participation in the management of Newport. However it said there has been no dialogue between the Government and Nexperia on these proposals.

“We are genuinely shocked,” said Versluijs. “The decision is wrong, and we will appeal to overturn this divestment order to protect the over 500 jobs at Newport. This decision sends a clear signal that the UK is closed for business.

“The decision is wrong – in many aspects.  It is legally wrong – being disproportionate given the remedies Nexperia has proposed. It is wrong for the employees of Nexperia Newport– creating further uncertainty. It is wrong for the UK semiconductor industry – taking out a strong player. It is wrong for the UK economy – undermining its semiconductor industry as we brought new production to Newport. It is wrong for the UK taxpayer – who could now be faced with a bill of over £100 million for the fallout from this decision.

“We will appeal this wholly incorrect decision. We are hugely disappointed by this extraordinary U-turn, and the greater uncertainty that it creates for our employees and their families in Wales whilst also not recognising the commitment of our 1,000 employees in Manchester,” he said.

The company points to its fab at Hazel Grove in Manchester reflecting its heritage from Philips Semiconductor.

There have been disagreements over how the takeover happened.

“Those who sold the business to us agreed that it was the only viable solution, and the deal was publicly welcomed by the Welsh Government,” said Versluijs. However non-executive director Malcom Penn highlighted this was not the case. Former boss Drew Nelson is also reported to be forming a consortium to buy the stake.

Nexperia said it will prioritise looking after the impacted employees at Nexperia Newport and reducing the negative impact on its customers.

A detailed statement is at www.nexperia.com

 


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