The UK’s largest chipmaker, Newport Wafer, will sell itself to Chinese semiconductor company Nexperia for $87 million next week, according to two sources familiar with the matter told CNBC.
Nexperia is a Dutch company but 100% belongs to Wingtech Technology of China. Speaking to CNBC, the company said negotiations were still ongoing.
Located in Newport, South Wales, Newport Wafer’s (NWF) chip factory was built in 1982 and is one of the few UK semiconductor manufacturers. Nexperia is expected to announce the deal on Monday or Tuesday next week, according to the source.
A Nexperia spokesperson said: “We are in constructive discussions with NWF about the future of NWF. Until we reach a conclusion, we cannot comment further.”
The deal took place in the context of the global chip crisis that has not shown any signs of “cooling down”, prompting more and more countries to want to strengthen their semiconductors. The vast majority of chips today are made in Asia, with TSMC, Samsung and SMIC among the biggest names in the world.
Tom Tugendhat, head of the UK government’s China Research Foundation, expressed concern about the possibility of a takeover of the NWF in a letter to UK Business Secretary Kwasi Kwarteng in June.
“I must emphasize once again that the acquisition of a leading British 200mm silicon and semiconductor technology development and processing plant by a Chinese legal entity represents a serious national security and economic risk. ,” his letter read.
He urged the British government to review the deal under the National Security and Investment Act introduced in April. This is a law aimed at protecting national technology firms from possible foreign takeovers.
According to a government spokesman, they were aware of a potential deal between Nexperia and the NWF. They cannot intervene at this time but will monitor the case closely and will not hesitate to use the powers of the statute. The semiconductor industry plays an integral role in the UK economy.
The $87 million price tag for the NWF is well below the $900 million price Texas Instruments announced it will pay to buy chipmaker Micron this week. The NWF has a number of large debts, including £20m owed to HSBC and £18m owed to the Welsh government. Meanwhile, CEO Drew Nelson will receive about 15 million pounds if the deal is successful.
NWF specializes in the production of chips used in powering applications for the automotive industry.
Earlier, chip designer Arm – considered the crown jewel of the British technology industry – agreed to sell itself to US chip giant Nvidia for $ 40 billion. However, the deal is being investigated globally after Qualcomm and other chipmakers objected.
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