An investment fund has been formed to launch a rescue bid for Newport Wafer Fab, if the acquisition of the Welsh chipmaker by Nexperia NV is blocked, according to UK newspaper the Telegraph.
The fund – Headlight Technology Partners Ltd. – is reportedly in talks to raise £500 million (about €590 million or US$590 million) for use across multiple investments. The fund is also in contact with Ron Black, boss of chip design firm Codasip GmbH, the former CEO of Imagination Technology.
Black is understood to have £300 million of funding and has indicated he is interested in supporting NWF if its sale to Nexperia is outlawed.
Headlight was founded in July 2022 by Alex Stewart, Henant Mardia, the chairman of BluWireless Ltd. and David Wither, CEO of Sofant Technologies Ltd. The aim of the fund is to “give teeth” to a UK semiconductor strategy, the report quotes Stewart saying. Headlight would aim to invest in advanced chip technologies and materials, such as compound semiconductors, graphene and photonics, including NWF, it added.
Investigation after deal
Nexperia NV (Nijmegen, The Netherlands), which is owned by Wingtech Technology (Shanghai, China), completed the acquisition of NWF in July 2021 and immediately renamed the factory Nexperia Newport.
The deal is now being investigated under National Security and Investment Act even though as the deal completed over a year ago it would be hard to untangle. The investigation is due to conclude on or before September 12.
Before the deal was made the board of directors of NWF wrote to Business Secretary Kwasi Kwarteng seeking protection from the takeover, but the UK government declined to act at that time.
This is despite the fact that Newport Wafer Fab (NWF) was the focus of activity 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).
Hostile takeover or job saver?
Nexperia’s position is that it saved an enterprise that was short of cash and would otherwise have gone bankrupt. Nexperia country manager Tony Versliujs has also said there is scope to contain an open access compound semiconductor foundry within the campus that Nexperia now controls (see Newport chip foundry is still possible, Nexperia’s Versluijs tells MPs).
But former NWF director Malcolm Penn takes a different view saying Nexperia, as shareholder of Newport Wafer Fab, refused to allow the company to access to loans and therefore pushed it to the edge of bankruptcy before it made its bid and posing as a savior (see Analyst Penn casts blame on Nexperia as Newport takeover investigated).
Meanwhile other players within the South Wales compound semiconductor ecosystem want to get involved with the creation of an open-access foundry (see IQE has vision for billion-pound foundry in Newport).
At the same time the UK government has opened an inquiry into the state of the semiconductor industry in the UK and its ability to supply chips. The inquiry comes after several quarters of chip supply chain bottlenecks with demand exceeding supply. During this time several industries have found their manufacturing capability curtailed by component shortages (see UK government opens inquiry about domestic semiconductor industry).
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