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MPs want clarity on takeover of Welsh chip fab by Chinese-state backed firm

Image credit: DT

MPs have expressed concern that a security review into the purchase of a Welsh chip fabrication plant by a Chinese firm with links to the Communist Party has still not been carried out.

In July 2021, it emerged that Nexperia – a Dutch chip firm wholly owned by Shanghai-based Wingtech – had confirmed plans to acquire the UK’s largest chip producer, Newport Wafer Fab in a deal valued at £63m.

Prime Minister Boris Johnson had asked the National Security Adviser to take a look at the deal after the government initially decided not to intervene, despite admitting that semiconductors are critical to the UK’s national security and wider global interests.

Now, the Foreign Affairs Committee has called on the government to clarify the circumstances in which the National Security Adviser was asked to engage in the review and why Johnson asked for it to be undertaken in the first place. They also question why the review was never taken.

The Committee also urged for greater clarity on the nature of the continued monitoring by the Investment Security Unit.

The chair of the Foreign Affairs Committee, Tom Tugendhat MP, said: “For over a year, the Committee has voiced its concern over the takeover of semiconductor manufacturer Newport Wafer Fab. The National Security and Investment Act has been in place for over three months yet we’ve seen no evidence of its use.

“Semiconductors are essential to every aspect of modern life and Newport Wafer Fab is one of the country’s leading manufacturers. Their takeover by Nexperia left many wondering why we are, seemingly, handing over critical security infrastructure to overseas companies with well-documented links to the Chinese state.

“The long-term security of our nation relies not just on our Armed Forces but on the resilience of our economy and that means ensuring our future stability is never sacrificed for the sake of short-term advancement.

“The Prime Minister’s assurances that work is under way are welcome. However, so few details have been provided to the Committee, that we are left with the unfortunate conclusion that no review has taken place.

“Today, the Committee is calling on the Government to clarify the reasons why the Prime Minister requested a review in Newport Wafer Fab and why this review has not begun. The Government has the tools, it just needs to use them.”

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