Nexperia - A Bigger Threat Than Huawei?

Britain's largest semiconductor chip manufacturer, Newport Wafer Fab (pictured), which has over a dozen UK government research contracts, is for sale and the potential new owners are Nexperia a wholly owned subsidiary of China's Wingtec. 

An analysis of the company by Datenna found that at least 30 percent of Wingtec's ownership could be traced back to the Chinese government. It has also received state subsidies for its consumer electronics manufacturing plants in China.

According to the former head of the UK's National Cyber Security Centre, Ciaran Martin, this would be a "first order strategic issue". 

Based in South Wales, the Newport Wafer Fab produces around 8,000 wafers a week which are primarily used by the automotive industry. Despite the critical nature of semiconductor fabs and growing hostility towards Chinese investors, the acquisition is not being reviewed under the newly introduced National Security and Investment Act.

Newport Wafer Fab has over a dozen UK government research contracts, largely funded by the British government’s innovation agency, Innovate UK through various grant schemes that amount to around £55 million ($75 million) according to sources. 

The prospect of  Britain’s largest semiconductor foundry falling into the hands of an entity from a country that has a track record of using technology to create geopolitical leverage bears comparison with the British government's rejection of af another Chinese firm, Huawei, as a supplier of equipment to the UK's fast growing 5G telecoms network. 

Huawei: No Improvement

The most recent annual UK government report from the Huawei Cyber Security Evaluation Center (HSEC), a special  telecoms equipment assessment centre says that “During 2020, Huawei have made strong progress at remediating an out-of- mainstream-support component within products in the UK’s networks. Huawei has also made progress, in line with expectations, on binary equivalence, fixed access issue, and vulnerability management.”

“Nonetheless, cognisant of the impact of COVID-19, the work of HCSEC continues to uncover issues that indicate there has been no overall improvement over the course of 2020 to meet the product software engineering and cyber security quality expected by the NCSC.”

Gov.UK:         CNBC:       Telegraph:     Data Center Dynamics:     NCSC:

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