Britain orders Chinese subsidiary to sell microchip plant, citing security risk

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The British government has ordered Chinese subsidiary Nexperia BV to sell the Newport Wafer Fab semiconductor chip plant to “mitigate the risk to national security.” Photo by Jaggery/Wikimedia Commons.

Nov. 17 (UPI) — The British government has ordered Nexperia BV — a subsidiary of a Chinese-owned company — to sell a British semiconductor microchip plant to mitigate national security risks.

The Secretary of State for Business, Energy and Industrial Strategy’s order said Nexperia’s July 2021 purchase of an additional 86% of shares in the former Newport Wafer Fab company is a “risk to national security” and the company must sell the factory.

“The location of the site could facilitate access to technological expertise and know-how in the South Wales Cluster (“the Cluster”), and the links between the site and the Cluster may prevent the Cluster being engaged in future projects relevant to national security,” the order said.

The British semiconductor chip plant, now known as Nexperia Newport Limited, was acquired by Netherlands-based Nexperia BV, a subsidiary of Wingtech. Wingtech is a Shanghai company partially backed by the Chinese government.

The British government is concerned about the technology and know-how China could gain “that could result from a potential reintroduction of compound semiconductor activities at the Newport site, and the potential for those activities to undermine U.K. capabilities,” according to the order to sell.

Nexperia U.K. Country Manager Toni Versluijs said in a statement that the company is “genuinely shocked” by the order and will appeal the directive to disinvest in the semiconductor factory “to protect the over 500 jobs at Newport”

“Nexperia does not accept the national security concerns raised. The far-reaching remedies which Nexperia offered to fully address the government’s concerns have been entirely ignored,” the company statement said.

Nexperia said the acquisition of the factory was cleared by two previous security reviews, adding it had offered not to conduct the compound semiconductor activities the British government is concerned about.

The company said, however, there has been “no dialogue between the government and Nexperia on these proposals.”

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