With Russia’s war in Ukraine shunting national security to the top of the agenda, it would seem like a strange time to sell off the UK’s largest microchip plant to the Chinese.
Yet the government’s national security adviser has given the go-ahead to the £62m sale of Newport Wafer Fab to Nexperia, a Dutch-owned subsidiary of Wingtech, a Chinese technology firm backed by the Chinese state.
Politico reported that Stephen Lovegrove’s review of the sale concluded that there weren’t sufficient national security concerns to block it.
Kwasi Kwarteng, the business secretary, is now under considerable pressure to intervene over the highly controversial takeover that security experts and Tory MPs believe is a big strategic blunder.
Tom Tugendhat, chairman of the House of Commons foreign affairs committee, said: “It’s not clear why we haven’t used our new powers under the National Security and Investment Act to fully review the takeover of one of our leading compound semiconductor companies.
“This is an area where China is sinking billions to compete. The government has no clear strategy to protect what’s left of our semiconductor industry.”
A spokesman from the Department for Business, Innovation and Skills said: “The Government is considering the case and no decisions have been made.”
Although the deal was completed in spring 2021, it could still be stopped. The National Security and Investment Act, which became law in January, gives ministers greater powers to block foreign takeovers.
And yet, with the sale having been given the all clear by Lovegrove, Kwarteng may find he doesn’t have a good enough reason to do so.
