Nexperia buys Newport Wafer Fab

July 05, 2021 // By Peter Clarke
China's Nexperia buys Newport Wafer Fab amid concerns
Nexperia, owned by Wingtech of Shanghai, China, has bought the Newport Wafer Fab in Wales, UK

Nexperia has bought Newport Wafer Fab in Wales to boost its analogue, power and mixed signal capacity.

Although Nexperia has not revealed the sum paid or how the deal was constructed, it was for $87m (£63m), according to reports. Newport Wafer Fab is capable of making power and compound semiconductor ICs on 200mm-diameter wafers and has a capacity of 35,000 wafers a month.

The fab was built for Inmos in 1982 to build the transputer and has since been owned by STMicroelectronics, International Rectifier and Infineon before becoming NWF in 2017. 

There may be the opportunity for continued UK-owned production in an empty building on the campus, say reports. These suggest Drew Nelson, former CEO and co-founder of Welsh wafer supplier IQE and outgoing chairman of Newport Wafer Fab, will spin off the compound semiconductor part of NWF. He could create a new venture and will be permitted to keep the Newport Wafer Fab name.

"The change in ownership of the Newport site marks an important step for the future of the facility as well as for the region. We are pleased that we are able to maintain the expertise in developing high end silicon devices in the 200 mm wafer fab while at the same time opening up opportunities for us to add new semiconductor technologies,” said Nelson.

Many have opposed the Chinese deal with the company's board of directors, 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.

In the meantime Newport Wafer Fab has become Nexperia Newport. This follows a $700m investment by Nexperia in its fabs in Manchester, UK and Hamburg, Germany, to boost capacity. 

“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. We are looking forward to becoming part of the global Nexperia team and are keen to keep the current workforce. Additional local resources may be required too. We are also pleased that we will be able continue to contribute to the local ecosystem,” said Paul James, Operations Director at the Newport site.

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.

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.

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."

www.nexperia.com

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