Chinese firm behind the purchase of the UK’s largest chip plant warns deal is at risk

The Chinese firm behind the purchase of Britain’s largest chip manufacturing facility earlier this summer has admitted that the acquisition could be unwound as the U.K. government reviews the takeover.

Shanghai-headquartered Wingtech Technologies warned shareholders in a note this week that “domestic and foreign industry policies” present a risk to the takeover of Newport Wafer Fab, which is located in South Wales.

The warning comes after British Prime Minister Boris Johnson ordered Stephen Lovegrove, the U.K.’s national security advisor, to investigate the deal. A decision could be announced in the coming days.

Wingtech acquired Newport Wafer Fab for around £63 million through a Dutch subsidiary it owns called Nexperia. The deal was announced in July and the terms of the agreement have now been confirmed, according to the Wingtech statement filed to the Shanghai Stock Exchange.

However, a spokesperson for the U.K. government told CNBC that the deal is still being reviewed. “We have considered this issue thoroughly, and will continue to monitor the situation closely,” the spokesperson said. Wingtech did not immediately respond to a CNBC request for comment.

Wingtech is a listed manufacturing company that assembles smartphones and other consumer electronics. However, in the last few years, the company has become increasingly interested in semiconductors. With around 20,000 staff and a market value of roughly $18 billion, it is one of many companies in China to be backed by the Chinese government.

Located on a 28-acre site, Newport Wafer Fab employs around 400 people and produces around 8,000 wafers a week. The wafers are thin pieces of silicon that circuit patterns are printed on to build chips. The fab’s 200mm wafers are largely used in the automotive industry, which has been hit particularly hard by a global chip shortage.

A consortium is preparing to bid for Newport Wafer Fab if the government decides to try to unwind the deal. It includes semiconductor mogul Ron Black, who led Imagination Technologies until it was bought by a Chinese firm.

British lawmakers have raised concerns that the U.K. is selling off some of its most-prized semiconductor companies to overseas buyers amid the global chip shortage.

Semiconductors are today found in everything from missile systems to vacuum cleaners and toothbrushes; they’re a critical component in today’s technology-driven economies and China has ambitions to be a world leader.

The U.K. government is also in the process of deciding whether to approve the sale of Cambridge-based chip designer Arm, which is currently owned by SoftBank, to U.S. chip giant Nvidia.

Source link

Related Articles

Back to top button