Power Semiconductors

Newport Wafer Fab gets another potential suitor

01 June 2022

The controversial sale of the Newport Wafer Fab to a Chinese-owned vendor is apparently still in the air as the U.K. government is now considering selling the fab to a U.S.-based consortium as an alternative.

The move follows the U.K. opening a national security investigation into the fab takeover by Nexperia, a subsidiary of Chinese firm WingTech Technology, which the government was criticized for being slow to stop the sale.

The criticism comes because of the ongoing chip shortage with other countries building up their domestic semiconductor capabilities to compete with the likes of China, Taiwan and Korea. The race to secure capacity is causing vendors globally to invest and develop semiconductor manufacturing to prevent potential future supply chain risks if another pandemic emerges or other geopolitical issues emerge.

Newport Wafer Fab is the largest semiconductor factory in the U.K. and was sold last year to Nexperia but using new powers under the National Security and Investment Act 2021, the government put the sale under full national security assessment.

As part of the assessment, the U.K. government is considering an alternative bid from the U.S. consortium. The consortium wants to pay for the fab partly from the U.K.’s Automotive Transformation Fund, a financial account set up to invest in projects that drive the development of a local supply chain for electric vehicles (EVs). Using this fund would assume the consortium would use the Newport Wafer Fab to manufacture semiconductors for use in EVs and EV charging points, according to the Telegraph

Previously, nine U.S. congressmen, including Michael McCaul, a member of the House of Representatives’ Foreign Affairs Committee, sent a letter to President Joe Biden asking him to prevent the sale of Newport Wafer Fab to a Chinese-owned company. The congressmen said that China should not be allowed to gain control of any segment of the supply chain as important as semiconductors in the U.K.

Members of the U.K. government also criticized British Prime Minister Boris Johnson for not acting on the sale of the fab. The sale also comes at a time when Europe is expanding its own goals in semiconductor manufacturing with a long-term goal of owning a 20% share of global chip manufacturing.

Recently, Europe announced the European Chips Act, which would provide about $50 billion in incentives and subsidies to entice manufacturers to build new semiconductor factories in the region. Spurred by this act, Intel Corp. has already pledged some $87 billion over the next decade to build new fabs in Germany as well as a design hub in France and manufacturing and foundry services in Italy, Poland and Spain.

To contact the author of this article, email PBrown@globalspec.com

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