Newport Wafer Fab: Restrictions blamed for proposed job losses

Nexperia factory
Nexperia has been told to give up 86% of its stake in the British microchip company

A proposed loss of 100 jobs at the UK's largest chip plant has been blamed on UK government restrictions.

Chinese-owned Nexperia was ordered by UK ministers to sell its 86% stake in the Newport site due to national security concerns.

Semiconductors made at Newport Wafer Fab are used in millions of electronic products, from smartphones to household equipment and cars.

The UK government said it is committed to a new site owner being found.

A government review found the takeover created two risks to national security - that it could "undermine UK capabilities" in producing compound semiconductors, and could "facilitate access to technological expertise and know-how".

Bosses had described losses among the 500 staff as "inevitable" after the firm was ordered to sell its controlling stake in November 2022.

The company was bought by Dutch-based firm Nexperia, a subsidiary of Shanghai-based Chinese firm Wingtech, in July 2021.

In announcing a consultation on the job losses, a company statement said: "This is a business decision that has not been taken lightly but is one that we are taking to protect the future viability of the site.

Nexperia staff
Some Nexperia staff have met MPs as they want to urge ministers to allow the facility to stay in the hands of its Chinese owners.

"As a result of the Secretary of State's Divestment Order in November 2022, and the restrictions imposed by the UK government, Nexperia has been forced to cancel its investment plans aimed at making the Newport site fit for the future, by introducing new technology and products."

The weakness in the global semiconductor market was also blamed for the job losses.

It said the staff reduction would take numbers back to the levels of its "acquisition to save Newport Wafer Fab from bankruptcy in July 2021".

The company said it will take "many months" until the site's future becomes clearer, the statement adding: "The Judicial Review (into the issue) process is disappointingly slow, for reasons beyond Nexperia's control.

"Continuing to explore a potential sale of the site, as directed by the government, is also likely to take many months.

"Our priority has always been our employees, and we are doing everything to support those affected at this time."

The Welsh Government has called on UK ministers to treat the sale of Newport Wafer Fab "as a critical priority" for it describes as a sector that is "a great success story for the Welsh and wider UK economy".

"It is critical that any new owner of the business has the means and intention to invest in the site as soon as possible," said Welsh Economy Minister Vaughan Gething.

The UK government spokesman said it understand this is a "concerning time" for workers at Newport Wafer Fab.

"While we don't comment on national security decisions, we recognise the significance of Nexperia Newport to the local economy and the uncertainty faced by its employees and families," said a spokesperson.

"Our commitment remains towards a successful divestment of the site."