Chip maker Nexperia says it has no plans to close Britain’s largest semiconductor plant, Newport Wafer Fab, but has called for a swift end to the government’s national security probe into its takeover of the foundry to provide clarity for staff and customers.
Toni Versluijs, the company’s UK manager, told MPs on Parliament’s Business, Energy and Industrial Strategy (BEIS) committee this morning that the company is investing in Newport, which it purchased last year for £63m, and its other UK site in Stockport.
Though based in the Netherlands, Nexperia is a subsidiary of Wingtech Group, a Chinese company. A paper published last week by the Policy Exchange think tank suggested that “there is a strong possibility that when Wingtech’s Shanghai plant reaches full capacity the company might close Newport and shift production to China, thus supporting China’s drive to reduce semiconductor imports”.
Wingtech’s ownership of Nexperia has prompted an investigation into the takeover of the Newport Wafer Fab on national security grounds.
What is the future of Newport Wafer Fab?
Speaking at the BEIS committee inquiry into the state of the UK semiconductor sector, Versluijs denied his company planned to close Newport Wafer Fab.
When asked by the committee about the future of the foundry, he said “we are not planning to shut any operations,” pointing out that Nexperia has been at its site in Stockport, near Manchester, for more than 50 years. “We have invested big time in Manchester, and big time in Newport,” he added. “We are here to stay.”
Versluijs claimed Nexperia’s intervention had “saved Newport from bankruptcy” and safeguarded the jobs of the 450 people who work at the plant. The fab was founded in 1982 by British semiconductor company Inmos, and now primarily manufactures power electronics chips used chiefly in the automotive industry.
Adding that Nexperia had invested £160m in its two UK sites over the last 15 months, Versluijs told the committee. “We’ve made this investment with no strings attached. We’ve secured jobs and enabled the needs of the local cluster in Newport to continue its aspiration to do things in compound semiconductors.”
Compound semiconductors are those made of silicon and another material, such as gallium nitride or GaN. They could potentially enable faster and more efficient chips, and Versluijs says his company is prepared to support the development of a spin-out which would pursue compound semiconductor research and development in Newport, work which was previously carried out at Newport Wafer Fab.
“We have provided an option to use one of our buildings to start such an activity (a compound semiconductor spin-out),” he said. “What it will require is funding and a viable business case.”
Newport Wafer Fab investigation needs ‘swift conclusion’
The government was initially accused of being slow to act when the takeover of Newport Wafer Fab was announced last year. Critics, including Conservative MP Tom Tugendhat, who chairs parliament’s Foreign Affairs Committee and is part of the China Research Group of MPs, said allowing a Chinese-owned company to take control of an important national asset was a mistake.
“The government is yet to explain why we are turning a blind eye to Britain’s largest semiconductor foundry falling into the hands of an entity from a country that has a track record of using technology to create geopolitical leverage,” Tugendhat said at the time.
After months of uncertainty, a probe under the National Security and Investment Act was launched in May. When the investigation is concluded, business secretary Kwasi Kwarteng will have the power under the act to block the takeover or impose sanctions on Nexperia.
Nexperia’s Versluijs called for a rapid conclusion to the investigation. “It needs to be done swiftly, our customers are becoming impatient for clarity as are our staff,” he said. “I think it’s in everyone’s interest to provide some clarification.”