UK to review purchase of semiconductor producer by Chinese-owned firm

Boris Johnson raises national security concerns over sale of Newport Wafer Fab

Last modified on Wed 7 Jul 2021 14.32 EDT

Boris Johnson has said the government will review the purchase of the UK’s largest producer of semiconductors by a Chinese-owned manufacturer, after it was criticised for apparently acquiescing to the takeover.

Johnson said on Wednesday that he had asked his national security adviser to review the purchase of Newport Wafer Fab by Nexperia, a Dutch firm wholly owned by China’s Wingtech.

It came only a day after the Welsh secretary said he was “satisfied” that security risks had been taken into account, in answer to criticism from Labour and Conservative MPs. Labour said on Tuesday the government should “use its powers under the National Security and Investment Act to urgently scrutinise this takeover”.

The semiconductor industry has risen in geopolitical prominence as China has targeted it as a key technology for the future economy. The industry already makes a trillion chips a year, but that number is expected to rise quickly as computers are added to more and more devices. Global shortages of computer chips have this year caused big delays for carmakers in the UK and beyond.

The government is also scrutinising the takeover of Cambridge-headquartered chip designer Arm by the US chip company Nvidia on national security grounds. That investigation, announced in April, also followed pressure to intervene.

Speaking to MPs on parliament’s liaison committee, Johnson said: “I think semiconductors are of huge importance to this country, and one of the things I wanted to look at immediately when I became prime minister was whether or not we could become more self-reliant.

“We have to judge that the stuff that they are making is of real intellectual property value and interest to China, whether there are real security implications.”

On Tuesday, Ed Miliband, the shadow business secretary, said: “Given the importance of semiconductors to our country’s critical infrastructure, there is a clear case to examine this on national security grounds.”

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