UK Government Blocks Chinese Company To Takeover Largest Chip-Factory Deal

On Nov 16th, the UK government ordered CCP-controlled company Nexperia to divest at least 86% of its stakes in Newport Wafer Fab (NWF). NWF is Britain’s largest chipmaker. The UK government spokesperson said that due to national security concerns, UK Secretary of State for Business, Energy and Industrial Strategy Grant Shapps has retrospectively blocked CCP’s Nexperia from completely acquiring NWF. Shapp said in a statement that he was concerned the company could start working on more advanced “compound” semiconductors at the Newport site and about “the potential for those activities to undermine UK capabilities“. In addition, the links between the NWF site and the cluster of highly specialized tech firms in Newport may prevent the cluster from engaging in future projects relevant to national security. Nexperia, which is headquartered in the Netherlands and controlled by CCP’s Wingtech Technology, originally held 14% stake in NWF. After the acquisition in July 2021, Nexperia took its shareholding in the chipmaker to 100% and renamed it Nexperia Newport Limited (NNL). The UK passed National Security and Investment Act 2021, which requires the government to scrutinize and intervene in business transactions, such as takeovers, to protect national security. The act came into force on Jan 4th, 2022 and retrospective arrangements apply to transactions completed after Nov 12th, 2020.