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Technology fund looks to possible Newport Wafer Fab rescue

Business news |
By Peter Clarke


An investment fund has been formed to launch a rescue bid for Newport Wafer Fab should the acquisition of the Welsh chipmaker by Nexperia be blocked by the UK government.

Headlight Technology Partners is reported to be 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 and 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 blocked.

Headlight was founded in July 2022 by Alex Stewart, Henant Mardia, the chairman of BluWireless. and David Wither, CEO of Sofant Technologies. Headlight would aim to invest in advanced chip technologies and materials, such as compound semiconductors, graphene and photonics, including NWF.

Investigation after deal

Nexperia, based in Nijmegen, The Netherlands, is owned by Wingtech Technology of Shanghai, China and completed the acquisition of NWF in July 2021, immediately renaming the factory Nexperia Newport.

The deal is now being investigated under National Security and Investment Act even though the deal completed over a year ago and 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.

 

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.

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 saviour.

Meanwhile other players within the South Wales compound semiconductor ecosystem want to get involved with the creation of an open-access foundry (see 

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.

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