The UK government is ordering a Dutch company to divest itself of a Welsh semiconductor plant over national security concerns revolving around China.
Dutch company Nexperia is owned by Wingtech, a Chinese company that is partially state-backed, according to CNBC. Nexperia, in turn, owns Welsh semiconductor firm Newport Wafer Fab. Nexperia owned a mere 10% stake in Newport Wafer Fab prior to July 2021 but ended up purchasing the remaining shares then, making it the sole owner of the Welsh company.
The UK government is concerned about the deal because of Nexperia’s ties to China. Chinese tech companies have increasingly come under scrutiny over concerns about their potential role in spying and surveillance. Under Chinese law, all companies are required to cooperate with Beijing’s surveillance efforts. Some companies, especially those with very close ties to Beijing, like Huawei, have already been blacklisted around the world over these concerns.
Given the importance of semiconductors, the UK government is taking no chances with Newport Wafer Fab’s ownership.
“The order has the effect of requiring Nexperia BV to sell at least 86% of NNL within a specified period and by following a specified process,” the UK’s Department for Business, Energy and Industrial Strategy said in a statement.
“We welcome foreign trade & investment that supports growth and jobs,” Grant Shapps, minister for business, energy and industrial strategy, tweeted Wednesday. “But where we identify a risk to national security we will act decisively.”