Nexperia is shocked by the Secretary of State’s order to divest Newport Wafer FabNovember 16, 2022
Nijmegen -- UK Government’s decision creates further uncertainty for Nexperia employees in Wales
Nexperia, headquartered in The Netherlands, is shocked by the UK Government’s decision to order the divestment of 86% of its semiconductor wafer factory in South Wales, known as Newport Wafer Fab (NWF), despite the acquisition being cleared by two previous security reviews. Nexperia does not accept the national security concerns raised. The far-reaching remedies which Nexperia offered to fully address the Government’s concerns have been entirely ignored.
The UK Government chose not to enter into a meaningful dialogue with Nexperia or even visit the Newport site. More than 500 employees in Newport also raised their own significant concerns about such a divestment – the Government has chosen not to listen to them and instead taken this decision which puts the livelihoods of them and their families, as well as more than £100m of taxpayers' money, completely unnecessarily at risk. Nexperia will now challenge the order and will do everything possible to keep the factory and protect its employees in South Wales.
On 25 May 2022, Nexperia learned from public media reports that the UK Government’s Secretary of State for Business, Energy and Industrial Strategy (BEIS) was exercising his statutory power to retroactively “call in” our acquisition of NWF, announced in July last year.
The Secretary of State exercised this power under the new National Security and Investment Act (which became effective in January 2022), after previous reviews by BEIS and the UK’s National Security Advisor, both of which found no substantive national security concerns that should give cause to block the acquisition.
Nexperia has now been notified by the Secretary of State that, despite the two previous reviews and our proposals, he now requires the divestment of 86% of Nexperia Newport.
Nexperia does not accept the potential national security concerns raised. The Company proposed far-reaching remedies to BEIS’s Investment Security Unit that fully address even these potential concerns. Nexperia offered, amongst others, not to conduct the compound semiconductor activities of potential concern and to provide the UK Government with direct control and participation in the management of Newport. There has been no dialogue between the Government and Nexperia on these proposals. The Government has not visited Newport, has not spoken with the over 500 employees whose jobs are now at risk, and none of the three responsible Secretaries of State have responded to Nexperia's requests for dialogue.
Responding to the decision on behalf of Nexperia, UK Country Manager, Toni Versluijs, said:
“We are genuinely shocked. The decision is wrong, and we will appeal to overturn this divestment order to protect the over 500 jobs at Newport. This decision sends a clear signal that the UK is closed for business. The UK is not Levelling Up but Levelling Down communities like South Wales.
“The decision is wrong – in many aspects. It is legally wrong – being disproportionate given the remedies Nexperia has proposed. It is wrong for the employees of Nexperia Newport– creating further uncertainty. It is wrong for the UK semiconductor industry – taking out a strong player. It is wrong for the UK economy – undermining its semiconductor industry as we brought new production to Newport. It is wrong for the UK taxpayer – who could now be faced with a bill of over £100 million for the fallout from this decision.
“We will appeal this wholly incorrect decision. We are hugely disappointed by this extraordinary U-turn, and the greater uncertainty that it creates for our employees and their families in Wales whilst also not recognising the commitment of our 1,000 employees in Manchester. As a globally successful European-centred company, with our roots at Royal Dutch Philips and proud, 90-year track record in Britain, it is astonishing that our employees face such jeopardy and hundreds of millions of pounds of foreign direct investment are not welcome.
“We rescued an investment-starved company from collapse. We have repaid taxpayer loans, secured jobs, wages, bonuses and pensions, and agreed to spend more than £80m on equipment upgrades since early 2021. Those who sold the business to us agreed that it was the only viable solution, and the deal was publicly welcomed by the Welsh Government.
“Quite apart from the apparent concerns raised by various parties, which we have been keen to address openly, we have been shocked by the Government’s process and its refusal to have a meaningful dialogue to discuss our proposals for a mutually positive solution. We made every effort to engage, to explain our business and made bold proposals for our operations in Newport and its management to nullify any potential fears about possible national security risks. We have been especially disappointed that we were denied the opportunity to discuss these with the Secretary of State himself or any of his political or Private Office team.”
Nexperia will prioritise looking after the impacted employees at Nexperia Newport and reducing the negative impact on its customers.
Nexperia is a leading expert in the high-volume production of essential semiconductors, components that are required by every electronic design in the world. The company’s extensive portfolio includes diodes, bipolar transistors, ESD protection devices, MOSFETs, GaN FETs and analog & logic ICs. Headquartered in Nijmegen, the Netherlands, Nexperia annually ships more than 100 billion products, meeting the stringent standards set by the automotive industry. These products are recognized as benchmarks in efficiency – in process, size, power, and performance — with industry-leading small packages that save valuable energy and space.
With decades of experience in supplying to the world’s leading companies, Nexperia has over 14,000 employees across Asia, Europe, and the US. Nexperia, a subsidiary of Wingtech Technology Co., Ltd. (600745.SS), has an extensive IP portfolio and is certified to IATF 16949, ISO 9001, ISO 14001, and ISO 45001.
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