The British government ordered Nexperia to sell 86 percent of Britain’s largest microchip factory. Nexperia’s head office is located in Nijmegen. This company is a subsidiary of Chinese Wingtech Technology.

Nexperia is acquiring Newport Wafer Fab in Wales in 2021. A government investigation into the takeover was announced earlier this year. Investigations have been made possible by the recent introduction of laws that allow governments to block acquisitions and investments in key sectors.

The law can be retroactively applied to transactions after November 2020. Minister Grant Shapps stated on Twitter that the UK welcomes international trade and investment which drives economic growth. He added that the government would act decisively when it detects threats to national security.

Nexperia is a risk, the government says

The government claims that Nexperia’s purchase poses a national security risk. According to the government, the takeover could affect UK chip capacity.

In addition, the government argues that chip manufacturing sites provide access to technology talent in the South Wales region. As an indirect consequence, these talents cannot be involved in national security initiatives.

Nexperia is based in the Netherlands and owned by Chinese Wingtech Technology. The chipmaker said it would not accept the ruling, adding that two previous security investigations had uncovered no national security concerns. The organization sees no justification for government action.

Management ‘shocked’

Toni Versluijs, Nexperia’s national manager in the UK, said the company was “absolutely shocked”, calling the decision “wrong” and indicating the organization would appeal against the order being cancelled.

According to the government, Nexperia will increase its stake in Newport Wafer Fab to 100 percent in July 2021 by acquiring 86 percent of the share capital.

The government order states that the Secretary of State believes the decision is necessary and reasonable to reduce national security risks.

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