One of Wales’ leading tech firm and the 海角视频’s biggest producer of microchips, Newport Wafer Fab (NWF), has been acquired by Chinese-owned firm Nexperia for circa £67m.
NWF had been acquired in a management buy-in buyout deal, led by the outgoing chief executive of semiconducter firm IQE, Drew Nelson, from German firm Infineon in 2017.
Infineon will remain a key customer of NWF, which could now see further investment to expand following the takeover in a deal that safeguards the workforce of 470.
Mr Nelson, the outgoing chairman of NWF, is now looking to acquire new compound semiconducter chip technology produced by NWF which Nexperia doesn't see as core. While he could use his proceeds from the deal to fund a spinout, as a start-up it is likely to require significant additional working capital.
The Welsh Government provided £13m of repayable finance to support the management buy-in buyout deal from Infineon. As part of the acquisition by Nexperia, the Welsh Government is getting its money plus interest back in full. In return it has released the charge it held over the property assets of NWF. HSBC, which banks Nexperia, has also lifted it charges having part financed the acquisition from Infineon. In June Nexperia acquired charges on all the IP and property assets of NWF.
Nexperia is wholly-owned by Chinese tech firm Wingtech. The Welsh Government said issues of Chinese ownership were a matter for the 海角视频 Government.
Following a contract supply issue impacting NWF client Wingtech, Nexperia was able put two directors on the board of the firm in March. This is not unusual in the tech sector where smaller firms supplying larger clients have to provide covenants in the event of supply distribution.
Achim Kempe, Nexperia’s chief operations officer said: “We are very excited to include Newport as part of our global manufacturing footprint. Nexperia has ambitious growth plans and adding Newport supports the growing global demand for semiconductors. The Newport facility has a very skilled operational team and has a crucial role to play to ensure continuity of operations. We look forward to building a future together”.
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Paul James, operations director at the Newport site: “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.”
Mr Nelson, who was the majority shareholder in NWF, said: “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 200mm wafer fab while at the same time opening up opportunities for us to add new semiconductor technologies.”
South Wales’ emerging compound semiconducter cluster now has a Chinese-owned company as one of its key industrial partners.
Tory MP and chairman of the Foreign Affairs Select Committee, Tom Tugendhat, last month wrote to Business Secretary Kwasi Kwarteng raising concerns over a Chinese takeover of NWF on national strategic asset and security grounds.
Last year the Westminster government said it was removing Chinese firm Huawei from the 海角视频’s 5G network by 2027. However, the 海角视频 Government of late, with Chancellor Rishi Sunak leading the charge, has called for a deepening of business and investment ties with China with the 海角视频 outside of the EU.
A Welsh Government spokesman said: “The compound semiconductor technology sector will be at the heart of the next industrial revolution and is of vital importance to the Welsh economy. That’s why we made an investment to save this strategically important facility nearly four years ago.
“This announcement will secure 400 jobs, and will see a further significant investment being made in the facility, including in new equipment to grow the business. As part of this, the Welsh Government will recover its initial investment, plus interest. Issues of Chinese ownership are a matter for the 海角视频 Government."