MPs call for urgent review into Chinese takeover of Welsh microchip factory

130721 Wafer fab

A cross-party group of MPs is urging the UK Government to intervene urgently in the sale of a Welsh microchip factory to a Chinese-owned company. 

The Commons Foreign Affairs Committee says the takeover of Newport Wafer Fab would see “the sale of one of the UK’s prized assets to a strategic competitor.”

Under the deal, said to be worth £63m, Wafer Fab would be sold to a Dutch semiconductor firm, Nexperia, which is in turn owned by a Chinese technology business. 

It had been welcomed by the sector and the Welsh Government for securing 400 jobs.

The UK Government’s Welsh Secretary said ministers in London were “satisfied” by security checks. 

But the Prime Minister sparked confusion when he said that he had asked his National Security Adviser, Sir Stephen Lovegrove, to “look again” at the sale and claimed that the Welsh Government had “rather sweetly” called for the review. 

The Welsh Government denies making any such request. 

The chair of the Foreign Affairs Committee, Tom Tugendhat said: "Our fiercest competitors, notably China, have a track record of using foreign investments to gain access to important technologies and information.

"We've witnessed too many of our country's brilliant tech firms disappear abroad with potentially significant economic and foreign policy implications."

In its report, the committee warned that failing to review the Wafer Fab deal would show that the UK Government "continues to hold an unrealistically optimistic understanding of the Chinese government's intentions" and is prioritising "short-term commercial interests" over the UK's long-term security.

"We recommend that the Government calls in the acquisition of Newport Wafer Fab by Nexperia for review and imposes appropriate mitigating measures, as a matter of urgency," the committee said.

The FAC report acknowledged that foreign investment is essential for the UK economy, but takeovers could result in "strategically vital companies" and intellectual property being lost overseas.