The UK is leaning toward restricting or blocking a Chinese company’s takeover of its biggest microchip factory, Newport Wafer Fab, after agreeing to extend a probe into the purchase, according to people familiar with the matter.
(Bloomberg) —
The UK is leaning toward restricting or blocking a Chinese company’s takeover of its biggest microchip factory, Newport Wafer Fab, after agreeing to extend a probe into the purchase, according to people familiar with the matter.
Unwinding the deal, more than a year after it was signed, would underscore an increasing crackdown on Chinese investment. Liz Truss, front-runner in the race to replace Boris Johnson as prime minister, has branded Chinese tech giants a security risk and vowed to reduce the UK’s dependence on China. Rishi Sunak, her opponent in the contest, has named China the “biggest long-term threat to Britain.”
Late Friday, Business Secretary Kwasi Kwarteng agreed to an additional extension with Nexperia Holding NV, owned by China’s Wingtech Technology Co., “to consider whether to make a final order under the National Security and Investment Act and, if so, what provision a final order should contain,” a spokeswoman for the Department for Business, Energy and Industrial Strategy said in response to a query from Bloomberg.
A final decision is expected within weeks, according to people familiar with the discussions. The delay indicates the transaction will be subject to remedies or a total veto, two people said, asking not to be named because the talks are private.
A representative for Nexperia declined to comment. The Dutch subsidiary of Wingtech hit back at suspicions it was under the sway of the Chinese state in an interview with Bloomberg last year.
No decision has been taken, and on Monday, the Conservative Party will choose a new prime minister who is expected to appoint a new Business Secretary, the minister responsible for the final decision.
The National Security and Investment Act came into effect in January and allows ministers to block or retroactively pick apart foreign takeovers in sensitive industries.
Newport Wafer Fab makes the silicon wafers on which microchips are etched. Once assembled the chips are largely used in simple applications like power switches, many of which go into cars. The facility has passed through a series of international owners since it was founded in 1982, and was bought by Nexperia in 2021 from former manager Drew Nelson.
Other possible buyers may be waiting in the wings if the deal is blocked, including a consortium led by Ron Black, the former chief executive officer of British chip design firm Imagination Technologies Group Ltd.
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