Britain’s national security adviser is to examine the takeover of the nation’s biggest semiconductor plant by a Chinese-owned company after lawmakers said it could threaten the country’s high-tech future.
Nexperia NV on Monday acquired Welsh-based Newport Wafer Fab, which makes semiconductors mainly for the auto industry.
“We are looking into it. I have asked the national security adviser to review,” British Prime Minister Boris Johnson told parliament on Tuesday.
The UK’s Enterprise Act gives the government 30 days to either allow the deal to proceed or call it in for scrutiny.
Nexperia’s parent company, Wingtech Technology Co (聞泰科技), said in a statement earlier that the deal faces “uncertainties.”
Beside supplying auto plants, Newport Wafer has been focusing on more advanced compound semiconductors that are at the heart of technologies such as 5G and facial recognition. The company also has strong ties to a number of UK universities.
Johnson told parliament that National Security Adviser Stephen Lovegrove would “judge whether the stuff that they are making is of real intellectual property value and interest to China, whether there are real security implications.”
“The government needs to call this in and block it,” former Conservative Party leader Iain Duncan Smith said in an interview. “This yet again shows that despite the legislation, despite all the earlier tough talk, the government is looking two ways on China. This sale is an investment disaster.”
Vetoing the deal could antagonize Beijing and signal a hardening of Britain’s stance on Chinese investments in the chip industry, which is at the center of a trade war between the US and China.
While Johnson has blocked China’s Huawei Technologies Co (華為) from taking part in Britain’s 5G wireless rollout, the government has tended to take a lighter-touch approach with chip industry deals.
Officials have waved through the sale of most of the UK’s major semiconductor firms, including Arm Ltd, acquired by Japan’s Softbank Group in 2016, and Imagination Technologies, which went to a Chinese-backed private equity firm in 2017.
A new law was passed this year giving sweeping powers for the government to intervene if takeovers are deemed a threat to national security. Ministers will have five years to scrutinize transactions and have powers to unpick them if they are judged a threat.
Although Newport Wafer is one of the UK’s largest fabs, it is tiny compared with facilities in the US and Asia, with annual revenue of £49.4 million (US$68.1 million), according to the latest UK accounts.
“Newport has a proven track record, and has unparalleled experience with advanced power and semiconductor technologies,” a spokesman for Netherlands-based Nexperia said in an e-mailed reply to questions from Bloomberg. “With the acquisition, Nexperia is guaranteeing its own supply chain.”
Nexperia was spun out of NXP Semiconductors NV in 2017 and acquired by a Chinese consortium led by Beijing Jianguang Asset Management Co (北京建廣資本). In 2018, Wingtech — which produces mobile phones and tablets — bought a controlling stake in Nexperia for US$3.6 billion.
“I think this should be called in under the legislation,” Conservative MP Damian Green said in an interview, referring to the Newport Wafer sale. “It’s clear this type of manufacturing facility lies at the heart of many industries of the future and it will be very important to our long-term resilience as a high-tech country.”
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to