Newport Wafer Fab: Chinese sale not probed despite PM pledge

Newport Wafer Fab makes wafers of semiconductors at its plant in Duffryn, Newport

An investigation pledged by the prime minister into a Chinese takeover of a semiconductor factory has not happened, a group of MPs has said.

In July 2021, Boris Johnson said the National Security Adviser would look at the takeover of Newport Wafer Fab.

The sale to Nexperia potentially compromises national security, the Foreign Affairs Committee warned.

The UK government said it was considering the case "and no decisions have been made".

In a report published on Tuesday, MPs said they had "no choice" but to assume the review had not yet started.

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Semiconductors, also known as microchips or chips, allow electricity to flow through devices and are the fundamental components of everything from smart phones to the vast data centres powering the internet.

They are seen as crucial to the UK's national security and wider global interests.

The MPs warned of their concerns about the sale of "one of the UK's prized assets to a strategic competitor", amid a global shortage of semiconductors.

Boris Johnson told the Liaison Committee in July 2021 that a review of the sale would take place

Nexperia is owned by Wingtech, a company listed in Shanghai and understood to be backed by the Chinese Communist Party.

Last week both Nexperia and the UK government denied reports that Nexperia's takeover had been approved by the government.

Tom Tugendhat, who chairs the Foreign Affairs Committee, said: "Semiconductors are essential to every aspect of modern life and Newport Wafer Fab is one of the country's leading manufacturers.

"Their takeover by Nexperia left many wondering why we are, seemingly, handing over critical security infrastructure to overseas companies with well-documented links to the Chinese state.

"The long-term security of our nation relies not just on our Armed Forces but on the resilience of our economy and that means ensuring our future stability is never sacrificed for the sake of short-term advancement.

"The prime minister's assurances that work is under way are welcome.

"However, so few details have been provided to the committee, that we are left with the unfortunate conclusion that no review has taken place."

New signs bearing the logo of Nexperia have been erected at the site where Newport Wafer Fab is based

The committee said it had made repeated requests to the National Security Adviser Sir Stephen Lovegrove for updates on the investigation but said the replies it received were not satisfactory.

The committee is now calling on the UK government to clarify what the NSA is doing, why the prime minister asked him to investigate and why that has not been done.

If the UK government were to intervene in the sale of Wafer Fab it could do so under the powers of a new law - the National Security and Investment Act - which came into force in January.