Welsh microchip firm sale to Chinese-backed company riskier than Huawei deal, ex-security boss says

Newport Wafer Fab has been sold to Chinese-backed firm Nexperia in a deal reportedly worth £63m

The sale of a Welsh microchip manufacturer to a Chinese-backed company poses a greater threat to Britain's interests than Huawei's involvement in the 5G network, according to the UK's former cyber security chief.

UK Prime Minister Boris Johnson has asked National Security Adviser Sir Stephen Lovegrove to examine the purchase of Newport Wafer Fab by Chinese-owned Nexperia for a reported £63 million, with MPs calling on ministers to urgently intervene.

Ciaran Martin, who was chief executive of the National Cyber Security Centre (NCSC) until August, said the future of microchip supply was a "first order strategic issue" for the country.

Mr Martin was in charge of the NCSC when it changed its security assessment of equipment made by Huawei last year, ultimately excluding the firm from the UK's 5G rollout on security grounds.

Ciaran Martin, a former head of the National Cyber Security Centre (NCSC), has expressed concern over the sale of Newport Wafer Fab Credit: PA Images

He told the Telegraph: "Huawei in the periphery of 5G only really mattered because the Trump administration became obsessed with it for reasons they never convincingly set out.

"By contrast the future of semiconductor supply is a first order strategic issue.

"It goes to the heart of how we should be dealing with China."

It comes after the influential Commons Foreign Affairs Committee (FAC) said the UK's "sovereignty should not be for sale" as they called for tougher action to prevent strategically important companies being sold overseas.

The cross-party report earlier this month called for the takeover of Newport Wafer Fab to be formally called in for review, with the Government imposing "appropriate mitigation measures".

Committee chairman Tom Tugendhat said at the time: "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."

The UK Government has asked National Security Adviser Sir Stephen Lovegrove to examine the purchase of Newport Wafer Fab

A senior figure at Nexperia told ITV News earlier this week that the firm was "surprised" and "disappointed" at the political row over the sale.

Charles Smit, a board member and General Counsel for Nexperia, said there were no security risks in the takeover, adding that it makes products used in everyday items such as toasters, hair dryers and cars - and nothing connected to sensitive data or military use. 

The UK Government has previously said it has considered the issue "thoroughly" and would continue to monitor the issue closely.

It added: "The National Security Adviser is reviewing this case and we will not hesitate to take further action if needed.

"We remain committed to the semi-conductor sector, and the vital role it plays in the UK’s economy."