The Chinese owner of Britain’s biggest microchip factory has admitted for the first time that the deal could be unwound as a national security review ordered by Boris Johnson is due within days.
Wingtech warned shareholders in a Chinese filing that “domestic and foreign industry policies” may jeopardise the takeover of Newport Wafer Fab, despite the sale to Wingtech-owned Nexperia being confirmed in recent days.
It comes as Sir Stephen Lovegrove, the UK’s national security adviser, prepares to submit a review into the deal that sources told The Telegraph was expected by the end of the month.
The Government has come under growing pressure to intervene in the sale amid concerns about China’s ambitions in the semiconductor industry and amid a national shortage of chips used in electric cars and other electronics.
In a filing to the Shanghai stock exchange this week, Wingtech told investors that “the target company [Newport Wafer Fab] may be affected by domestic and foreign industry policies, [the] economic environment and other factors in the follow-up business process”.
It came as the £63m sale of the south Wales company, which makes the wafers on which semiconductor circuits are printed, was rubber-stamped. Filings at Companies House showed that Newport Wafer Fab’s owners, including chief executive Drew Nelson, transferred their shares to Nexperia, a Dutch semiconductor company owned by Wingtech, in July.
Although Sir Stephen’s review is expected soon, it could take months for the Government to reverse the deal if it decides it presents a national security risk. New legislation allowing it to block the takeover does not come into force until January.
The deal has raised concerns over the future of a promising microchip hub in South Wales, centred around building advanced “compound” semiconductors, that which relied on Newport Wafer Fab’s “open foundry” model.
Andy Sellars of CSA Catapult, a publicly funded organisation set up to support companies in the region, said there was a “vibrant ecosystem in south Wales, translating world-leading university research into commercial applications” and that “access to an open foundry forms a critical step in the ecosystem”.
The Telegraph revealed last week that a consortium of technology companies was considering a £300m investment in the company if the Nexperia sale is blocked.
A spokesman for the Henry Jackson Society, a national security think tank, said: “It was clear from the start that this deal risked our national security and that the Business Secretary needed to use his powers. That the Chinese acquirer has now recognised the risk the Government might act is only a late awakening to reality on both their part and that of the Government.”