One of Wales’ leading technology firms, Nexperia Newport, has begun a consultation with employees over proposals to reduce staffing levels by around 100.
The Newport-based and 海角视频’s biggest microchip plant, which currently employs around 600, blamed the decision partly on a 海角视频 Government ruling last year that its owner in Amsterdam-based Nexperia - which itself is owned by Chinese and Shanghai-listed tech company Wingtech - divest at least a 86% stake in the business on grounds of national security.
The 海角视频 Government used the National Security and Investment Act to retrospectively overturn a deal that saw Nexperia taking sole ownership of the plant from Neptune Six, in the summer of 2021.
READ MORE: {}
Having previously had a minority stake Nexperia was able to takeover the plant, previously known as Newport Wafer Fab, by evoking a clause in the event of the facility being unable to meet customer orders. It acquired the business for just £63m.
Nexperia said that restrictions imposed by the Westminster government since the divestment order has meant it has been forced to cancel investment plans at the facility aimed at what is said was making it “fit for the future, by introducing new technology and products.”
In a statement Nexperia added; “At the same time, the weakness in the global semiconductor market that started in Q4 2022 is continuing today. We have been determined to maintain a surplus of capacity for as long as we could, but we currently see no other option than to reduce the number of employees in Newport as the increased size of the workforce was dependent upon the terminated investment plans.
“When Nexperia first acquired the Newport site, we saw a strongly positive long-term future for its highly skilled people. Nexperia expanded the team there and provided pay rises, bonuses and improved pension plans.”
Nexperia is complying with the divest ruling and earlier this year appointed US advisory firm ATREG to advise on a possible sale of the facility.
Most Read
However, it is still seeking a legal route to overturn the 海角视频 Government ruling via a judicial review - for which no date has yet been set in the High Court.
On that process it added: “It will take many months until the Newport site’s future will become clearer. The judicial review process is disappointingly slow, for reasons beyond Nexperia’s control. Our priority has always been our employees, and we are doing everything to support those affected at this time.”
It said the restructuring plans would take the plant’s workforce back to around the level at time it acquired the business.
A spokeman for the Welsh Goverment said: "This announcement from Nexperia is extremely worrying and will come as a body blow to its talented workforce in Newport.
“The is ambitious for the compound semi conductor industry in south Wales. We will continue developing it further with major companies who are investing in the cluster. Our aim is keep doing so alongside a 海角视频 Government that acts like a genuine partner.
“However, we have consistently warned that delays and indecision from the 海角视频 Government over the potential sale of Newport Wafer Fab have consequences. The recent lacklustre 海角视频 Semiconductor Strategy fell short of the ambition we should be setting for the sector and unhelpful comments from a 海角视频 minister regarding the cluster in South Wales did nothing to restore the confidence we need.
“Once again, we reiterate our calls for the 海角视频 Government to treat the sale of Newport Wafer Fab as a critical priority for a sector that is - and will continue to be - a great success story for the Welsh and wider 海角视频 economy.
Don’t miss
“It is critical that any new owner of the business has the means and intention to invest in the site as soon as possible. Meanwhile, the Welsh Government will provide assistance and support for all employees affected by today’s announcement.”
Making the announcement ordering Nexperia to divest the then Department for Business and Energy said: “The Secretary of State considers that a risk to national security relates to: technology and know-how that could result from a potential reintroduction of compound semiconductor activities at the Newport site, and the potential for those activities to undermine 海角视频 capabilities, and the location of the site could facilitate access to technological expertise and know-how in the South Wales cluster (compound semiconducter), and the links between the site and the cluster may prevent the cluster being engaged in future projects relevant to national security.
“The Secretary of State considers that the final order is necessary and proportionate to mitigate the risk to national security.”