Industry News

UK orders Ansei Semiconductor to divest Newport fab

Update time : 2022-12-01 09:52:40

The UK government has issued an ultimatum to Chinese chip company Ansei Semiconductor to sell at least 86% of its Newport fab (NNL), expressing concerns about national security.
The review was triggered on 5 July 2021 when Anse Semiconductor acquired an additional 86 per cent of the share capital of Newport Fab (now NNL), bringing its stake to 100 per cent.
The Secretary of State's order said that the ownership posed a risk to national security in relation to technology and patents arising from the possible reintroduction of compound semiconductor activities at the Newport site, and the potential for these activities to undermine the UK's own capabilities.
There are also concerns that the location of the site may facilitate access to the technical expertise and knowledge of the South Wales compound semiconductor cluster, and that the link between the site and the cluster may prevent the cluster from participating in future projects related to national security.
Ensyn Semiconductor, which is based in the Netherlands but is a subsidiary of Chinese company Wintel Technology, said it was shocked by the decision and did not accept the alleged reasons for concern about potential national security.
Responding to the decision, UK managing director Toni Versluijs, representing Ansys Semiconductor, said: "We are very shocked. This decision is wrong and we will appeal to overturn this divestment order in order to protect the more than 500 jobs in Newport. This decision sends a clear signal that the UK is closed to business. The UK is not escalating, it is downgrading communities like South Wales."
He added: "We have saved an investment-starved company from collapse. Since the beginning of 2021, we have repaid taxpayer loans, secured jobs, wages, bonuses and pensions and agreed to spend over £80 million on equipment upgrades. Those who sold the business to us agreed that this was the only viable solution and the deal had been publicly welcomed by the Welsh Government."
Simon Thomas, founder and CEO of UK-based graphene microchip company Paragraf, commented, "It is good to finally see a decision on the Newport fab case. The industry knows that national security is undoubtedly important and that every effort must be made to ensure that the UK and its interests are protected. That said, significant steps must be taken to minimise the delays involved in these future investigations."
He added: "UK companies cannot afford to lose their competitive edge, which is an unintended consequence of these protracted investigations and lack of direction, leading to frustrated customers and shareholders and the possibility of looking elsewhere for clarity of purpose."
"The Government should consider specific and effective procedures to review national security issues with clearly outlined and transparent processes that provide timely results for all. Of course, we need to protect national security, but not to the detriment of British business interests."
"Paragraf is still waiting for an answer to the more important question of whether the government believes there is a future for the UK semiconductor industry and how they will develop and protect that future."
In September, the Financial Times reported that Drew Nelson, a compound semiconductor specialist and former chief executive of IQE, was looking to join forces with private equity group Palladian Investment Partners to buy back the Newport fab.

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