Nexperia Sells Newport Wafer Fab for $177m After National Security Probe

Nexperia, a semiconductor company, has sold Newport Wafer Fab, the UK's largest semiconductor manufacturing plant, to US-based Vishay Intertechnology for $177 million following a national security inquiry and intervention by the UK government.

Vishay Intertechnology, known for its production of chips and components for power electronics, plans to expand the site and make MOSFETs (Metal-Oxide-Semiconductor Field-Effect Transistors) at the Newport Wafer Fab. The company is embarking on a $200 million program to increase the facility's capacity, aiming to safeguard the jobs of 500 employees in South Wales.

Joel Smejkal, CEO of Vishay Intertechnology, stated that their goal is to invest in the necessary capital to set up production for SiC Trench MOSFETs and diodes at the Newport Wafer Fab. Vishay's acquisition aligns with its capacity expansion plans for automotive and industrial end markets, as well as the UK's strategic goal of improved supply chain resilience. The company also intends to collaborate with the Compound Semiconductor Cluster in South Wales and join stakeholders committed to developing the semiconductor industry in the UK, including university and community partners.

Ownership and Government Intervention

It is noteworthy that Nexperia is a company headquartered in the Netherlands but owned by Chinese company Wingtech. When Nexperia acquired Newport Wafer Fab in 2021, concerns were raised by British Members of Parliament regarding a Chinese-owned company purchasing what could be considered a national strategic asset, posing a potential security risk. This led to an investigation under the National Security and Investment Act, and eventually, a ruling was issued ordering Nexperia to sell at least 86% of its holding in the site.

As a result, the UK's biggest chip plant will remain in foreign ownership, sparking debates about national security and foreign investment in critical infrastructure. Recently, the UK government launched a semiconductor strategy promising a 1 billion investment in the industry over the next decade, with a focus on semiconductor design rather than manufacturing. The hope is that the Newport site can become the centerpiece of a semiconductor cluster in South Wales, developing next-generation compound semiconductors made of silicon and other materials such as gallium nitride, which can significantly boost performance.

Impact on Jobs and Business Strategy

Despite the acquisition by Vishay Intertechnology, there have been concerns about job security at the Newport Wafer Fab. Earlier this year, Nexperia announced plans to cut at least 100 jobs due to opposition from the UK government and difficult market conditions.

Toni Versluijs, UK manager at Nexperia, expressed disappointment and stated that the company had preferred to continue the long-term strategy it had implemented when it acquired the investment-starved facility in 2021. However, the unexpected and wrongful divestment order by the UK government led to a change of plans and the subsequent sale to Vishay Intertechnology.

He further added that staff at the plant needed clarity about its future to avoid further losses, and the agreement with Vishay is seen as the most viable option to secure the future of the site. The commitment from Vishay to further make the Newport Wafer Fab a success story is encouraging, and Nexperia's position with regard to the UK government's order remains unchanged.

Future Developments and Industry Collaboration

Looking ahead, the semiconductor industry in the UK, particularly in South Wales, is expected to see significant developments. The collaboration between companies like Vishay Intertechnology and the Compound Semiconductor Cluster in South Wales, along with partnerships with key stakeholders and universities, indicates a promising future for the semiconductor industry in the region. The focus on next-generation compound semiconductors and supply chain resilience aligns with the broader goals of the UK's semiconductor strategy.

The acquisition by Vishay Intertechnology and the subsequent developments will further contribute to shaping the landscape of the semiconductor industry, with potential implications for the global supply chain and technology advancement.

Questions and Answers

1. What impact will the acquisition of Newport Wafer Fab by Vishay Intertechnology have on semiconductor manufacturing in the UK?

Answer: The acquisition is expected to bring significant developments and advancements to the semiconductor manufacturing industry in the UK, particularly in South Wales, with a focus on expanding capacity, investment in capital, and collaboration with industry stakeholders and universities.

2. How has the involvement of the UK government impacted the sale of Newport Wafer Fab?

Answer: The UK government's national security concerns and subsequent intervention led to the sale of Newport Wafer Fab, with an order for Nexperia to divest a significant percentage of its holding in the semiconductor manufacturing plant.

3. What are the potential implications of the acquisition by Vishay Intertechnology for job security at Newport Wafer Fab?

Answer: There have been concerns about job security, as witnessed by the announcement of job cuts by Nexperia earlier this year. However, Vishay Intertechnology has expressed its commitment to safeguarding the positions of the employees at the facility.

4. How does the acquisition of Newport Wafer Fab align with the broader semiconductor strategy in the UK?

Answer: The acquisition aligns with the UK's strategic goal of improved supply chain resilience and future development in next-generation compound semiconductors, as outlined in the UK semiconductor strategy.

5. What potential opportunities and challenges may emerge from the acquisition of Newport Wafer Fab?

Answer: The acquisition presents opportunities for collaboration, expansion, and innovation in the semiconductor industry. However, challenges related to foreign ownership and national security concerns may continue to be debated.

6. How does the involvement of foreign ownership in critical infrastructure impact national security considerations?

Answer: The involvement of foreign ownership in critical infrastructure has raised concerns about national security, especially regarding potential risks and vulnerabilities in strategic assets.

7. What are the expectations for the semiconductor cluster in South Wales and its potential impact on the global semiconductor industry?

Answer: The semiconductor cluster in South Wales is expected to contribute to the development of next-generation compound semiconductors and supply chain resilience, potentially influencing advancements in the global semiconductor industry.

8. How do the plans of Vishay Intertechnology align with the development of MOSFETs and diodes at Newport Wafer Fab?

Answer: Vishay Intertechnology plans to invest in the necessary capital to set up production for SiC Trench MOSFETs and diodes at the Newport Wafer Fab, aiming to expand capacity and align with the company's strategic goals.

9. What role do partnerships with universities and community partners play in the future of the semiconductor industry in the UK?

Answer: Partnerships with universities and community partners are expected to foster innovation, research, and talent development in the semiconductor industry, contributing to its long-term growth and resilience.

10. What are the broader implications of the developments in the semiconductor industry for technology advancement and the global supply chain?

Answer: The developments in the semiconductor industry, including investments, expansion, and collaboration, have the potential to influence technology advancement and reshape the global supply chain, particularly in critical technologies.

Nexperia Sells Newport Wafer Fab for $177m After National Security Probe

Ownership and Government Intervention

Impact on Jobs and Business Strategy

Future Developments and Industry Collaboration

Questions and Answers

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