London Daily

Focus on the big picture.
Saturday, May 31, 2025

Chinese tech firm Nexperia told to sell majority stake in UK microchip factory over 'national security risk'

Chinese tech firm Nexperia told to sell majority stake in UK microchip factory over 'national security risk'

Chinese owner ordered to reduce stake in Newport Wafer Fab semiconductor factory "putting the livelihoods of [workers] and their families, as well as more than £100m of taxpayers' money, completely unnecessarily at risk"
A Chinese-owned tech company has been told to sell the majority of its stake in a UK silicon chip factory due to security concerns.

The government has said Nexperia must reduce its stake in Newport Wafer Fab by 86%, back to its previous holding of just 14% when it took over the firm in 2021, in an effort to "mitigate the risk to national security".

Nexperia responded to the announcement with shock and frustration, saying it does not accept the state's rationale and 500 jobs are now at risk.

"The far-reaching remedies which Nexperia offered to fully address the government's concerns have been entirely ignored," the company said in a statement.

"The UK government chose not to enter into a meaningful dialogue with Nexperia or even visit the Newport site.

"More than 500 employees in Newport also raised their own significant concerns about such a divestment - the government has chosen not to listen to them and instead taken this decision which puts the livelihoods of them and their families, as well as more than £100m of taxpayers' money, completely unnecessarily at risk."

The company said it will challenge the order in an effort to keep the factory and jobs.

The acquisition of the Newport Wafer Fab factory had been investigated by government over national security concerns.

The factory has for decades been a critical site, producing tiny silicon chips. Currently there is a global shortage of the semiconductors that go in cars and everyday electronics.

The investigation took place under the new National Security and Investment Act, which grants power to the government to retrospectively intervene in a deal. Nexperia had already completed its purchase of Newport Wafer Fab for a reported £63m.

Security concerns were raised by the industry and MPs alike.

Wednesday's statement from the Department for Business Energy and Industrial Strategy identified security concerns, saying that potential development of compound semiconductors at the Newport site could "undermine UK capabilities".

Ciaran Martin, the former chief executive of the National Cyber Security Centre, described the acquisition as posing a greater threat to British interests than Chinese company Huawei's involvement in the 5G network.

The former chair of the Commons Foreign Affairs Committee, Tom Tugendhat had expressed concern that companies particularly in China, had a track record of using foreign investments to gain access to important technologies and information.

An announcement of the investigation results has been continuously delayed. The original deadline for a decision was due in June, but the BEIS asked for a 45-day deadline to make its decision.

It was beset by further delays as the Tory leadership contest trundled on over the summer and the government played political musical chairs following the departure of former chancellor Kwasi Kwarteng and subsequently former prime minister Liz Truss.

The extended September and October deadlines passed without decision.

What happens next is unclear. The Financial Times reported that previous owner Nelson hopes to buy back the company. Under the terms of Nexperia's takeover Nelson has the first opportunity to buy it back.

Nexperia has consistently said it and its parent company Wingtech are separate from the Chinese state.
Newsletter

Related Articles

0:00
0:00
Close
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
U.S. Justice Department Reduces American Bar Association's Role in Judicial Nominations
U.S. Department of Energy Unveils 'Doudna' Supercomputer to Advance AI Research
U.S. SEC Dismisses Lawsuit Against Binance Amid Regulatory Shift
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
Italy Faces Population Decline Amid Youth Emigration
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Trump Accuses China of Violating Trade Agreement
Gerry Adams Wins Libel Case Against BBC
Russia Accuses Serbia of Supplying Arms to Ukraine
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
Chinese Woman Dies After Being Forced to Visit Bank Despite Critical Illness
President Trump Grants Full Pardons to Reality TV Stars Todd and Julie Chrisley
Texas Enacts App Store Accountability Act Mandating Age Verification
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Vatican Calls for Sustainable Tourism in 2025 Message
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Trump Threatens 25% Tariff on iPhones Amid Dispute with Apple CEO
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
Liverpool Car Ramming Incident Leaves Multiple Injured
Australia Faces Immigration Debate Following Labor Party Victory
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
Macron Dismisses Viral Video of Wife's Gesture as Playful Banter
Cleveland Clinic Study Questions Effectiveness of Recent Flu Vaccine
Netanyahu Accuses Starmer of Siding with Hamas
Junior Doctors Threaten Strike Over 4% Pay Offer
Labour MPs Urge Chancellor to Tax Wealthy Over Cutting Welfare
Publication of UK Child Poverty Strategy Delayed Until Autumn
France Detains UK Fishing Vessel Amid Post-Brexit Tensions
Calls Grow to Resume Syrian Asylum Claims in UK
Nigel Farage Pledges to Reinstate Winter Fuel Payments
Boris and Carrie Johnson Welcome Daughter Poppy
×