Chinese takeover of British microchip factory stopped creation of ‘hundreds’ of UK jobs

A British semiconductor supplier to Apple has said plans that would have created “hundreds of jobs” in South Wales were undone by the Chinese-backed takeover of the UK’s largest microchip plant.

Rockley Photonics, which develops tiny semiconductors that are used to monitor vital signs in smartwatches, had been planning to use facilities at Newport Wafer Fab to build its chips, having previously used the site for research.

Newport Wafer Fab was taken over by Nexperia, a Dutch company owned by China’s Wingtech, last year. Sources said the company has since used the facility to focus on building its own silicon, rather than developing an “open-access” foundry, which would have allowed competitors to use the space to build components, as was the case under its previous management.

Andrew Rickman, boss of New York-listed Rockley, said this had forced the company to find alternative facilities and stopped jobs being created. It has since expanded its work in the US to make up the shortfall.

He said: “It would have led to hundreds of jobs in the relatively short term. There would have been further investment in that site. We are talking about semiconductor manufacturing technology that could have been creating millions of chips per week.”

A Nexperia spokesman said: “There is not, and never has been, an integrated photonics manufacturing capability at the Newport site.

“When Nexperia acquired the site, it granted option rights to the vendors to acquire a portion of Newport Wafer Fab (referred to as Fab 10) to enable them to continue working on the possibility to start photonics activities once they have a funded viable business case .

“In essence, nothing has changed as the vendors were already working on building such a business case prior to Nexperia’s acquisition in order to realize their own ambitions.

Nexperia has said its £63m takeover of Newport Wafer Fab saved the plant and hundreds of jobs at the site. The company said it has invested £160m in two UK sites since the deal.

However, the deal has been subjected to government scrutiny and investigated under the National Security and Investment Act. That investigation, under Business Secretary Kwasi Kwarteng, was extended by a further 45 days until September 12.

Rockley, which is based in California and the UK, said it had continued to invest in South Wales, which has become a hub for advanced semiconductor research.

He said the takeover of Newport Wafer Fab meant the possibility of using the facility to develop his company’s chips fell through. Mr Rickman said: “We had plans to ramp up manufacture there. We are disappointed we can’t ramp up and seal the benefits in South Wales.”

However, Nexperia told MPs last week that it could still offer an unused part of the foundry to serve other chip companies. Tony Versluijs, an executive at Nexperia said the company “provided such an option” but that it would require “funding and a viable business case”.

Mr Versluijs warned MPs that Nexperia clients were becoming “impatient” over the delays to the investigation into the takeover. The takeover was originally given the green light by the Government, but was called in months later in May.


Leave a Comment

Your email address will not be published. Required fields are marked *