The 海角视频 Government is still assessing whether to call in the Chinese acquisition of one of the Wales’ leading firms on national security grounds - with just over a two month window left to decide.
Last year Amsterdam-based Nexperia, which is owned by Chinese and Shanghai listed Wingtech acquired semiconductor firm Newport Wafer Fab (NWF), in a £63m deal.
It previously had a minority 15% stake in the Newport-based firm, but had a right to acquire the entire business in the event of customer supply issues. This saw it taking over the plant from indigenous owner of the 海角视频’s biggest chip making facility, Neptune Six, last summer.
The acquisition has been criticised by the Foreign Affairs Select Committee. The cross party committee of MPs said the takeover by Nexperia, a company which it said has links to the Chinese Communist Party, represented “the sale of one of the 海角视频’s prized assets to a strategic competitor and potentially compromises national security.
The committee, chaired by Tory MP Tom Tugendhat, published a follow-up NWF report earlier this month asking the 海角视频 Government to intervene using the National Security & Investment Act, that came into effect in January.
The committee also questioned whether a commitment given last year by Prime Minister Boris Johnson that his national security adviser Sir Stephen Lovegrove would also look at the NWF deal, had taken place.
The new legislation gives the 海角视频 Government powers to scrutinise and intervene in acquisition of entities and assets in, or linked to the 海角视频, that may pose national security risks.
In response to the committee’s following up report the 海角视频 Government said the matter of whether to call in the acquisition of NWF (now trading as Nexperia Newport) for review was still ongoing, but that any decision to do so would be a matter for Business Secretary Kwasi Kwarteng. They also said that the Prime Minister’s national security adviser is considering the acquisition.
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It said: “The government continues to consider the acquisition of Newport Wafer Fab by Nexperia and no decisions have been made. As part of that consideration, the Prime Minister asked the National Security Adviser to review the case.
“Under the National Security & Investment Act 2021, and previously under the Enterprise Act 2002, the Secretary of State for Business, Energy and Industrial Strategy must take decisions relating to national security in a quasi-judicial manner, ensuring that he makes his decisions on the facts and evidence of an individual case.”
While the acquisition was made before the enacting of the legislation, it could still be call in for review as it was struck after the introduction of the National Security and Investment Bill in parliament in November 2020.
However, Mr Kwarteng only has until June 4th to decide whether to review the NWF deal.
The Competition and Markets Authority (CMA) didn’t intervene to review the acquisition on market domination grounds - it had a four month window to act which has now closed.
Alongside its smaller Manchester fab, Nexperia currently controls more than 65% of the large scale power chip manufacturing capacity of the 海角视频. The only other large scale plant is owned by US firm Diodes Inc in Greenock, Scotland.
If the 海角视频 Government did move against the acquisition, Nexperia would have to the sell the business for what it paid for it.