Sir Geoffrey Clifton-Brown calls on the Government to use the National Security and Investment Act 2021 to step in to prevent the Chinese takeover of a firm that creates microchips that are of vital importance to our national security.
Afterwards Sir Geoffrey said;
“I am very pleased that the Speaker agreed to grant me an Urgent Question on the sale of the Newport Wafer Fab semiconductors plant in Duffryn, Newport, to the Chinese-owned firm Nexperia. However, the Government’s response was totally predictable. I was backed up by a number of pertinent questions from colleagues from both sides of the House but it seems fairly clear from the Minister's replies that the Government will not step in and stop the sale of this extremely important and strategic asset to the Chinese.
“At a time when there is a worldwide shortage of microchips, the Chinese have done what they have done in the past with other important commodities, buying up companies and putting the price up, impacting the final cost of the huge number of electronic devices that depend on these microchips. I think the Government is being very short-sighted on this matter.”
Newport Wafer Fab Sale
(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the sale of the Newport Wafer Fab semiconductors plant in Duffryn, Newport, to the Chinese-owned firm Nexperia.
Thank you very much for granting this urgent question, Mr Speaker. I thank the Minister also for being present to answer it. I understand that the Government cannot comment on security matters, but the purpose of the urgent question is to give Parliament an opportunity to make its views known about the strategic importance of the Chinese takeover of Wafer Fab, a semiconductor manufacturer based in Newport.
The Chinese firm Wingtech Technology has a controlling stake in the acquiring company Nexperia, which supplies Chinese companies that create smartphones, including Huawei. The Prime Minister stated at the Liaison Committee last week on 7 July:
“This Government is spending a huge quantity of taxpayers’ money to make sure that we get Huawei out of our telecommunications networks.”
Would it not therefore be completely inconsistent if Government policy allowed the takeover of a firm creating microchips of such importance to our national security? The Prime Minister also stated that we need to be more self-reliant, and that he was told that it costs £9 billion to build a semiconductor factory. Why would we allow such sophisticated national infrastructure to be sold?
Finally, while I agree with the Prime Minister that we do not want an
“anti-China spirit to lead to our trying to pitchfork away every investment from China into this country”,
in this particular case the security issues should be paramount. China considers this matter vital for its national security, as do other countries, including our ally the United States. Why are our Government not taking the same view?
We have gone slightly out of order. The hon. Member was meant to just ask the urgent question, and then come back. If the Minister can roll the two together, I will then go to the shadow Minister.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Amanda Solloway)
Of course, Mr Speaker. The Government recognise Newport Wafer Fab’s value as a company, and its contribution to consortia based at the south Wales compound semiconductor cluster. The Government are committed to the semiconductor cluster and the vital role that it plays in the UK’s economy. The Welsh Government have previously provided financial support to the company, as economic development is devolved and the responsibility of the Welsh Government.
Under the Enterprise Act 2002, the Government have powers to intervene in mergers and takeovers that raise national security concerns. We have recently strengthened those powers in the National Security and Investment Act 2021, which is expected to come into force at the end of this year, but it is right that commercial transactions are primarily a matter for the parties involved. The Government have been in close contact with Newport Wafer Fab, but do not consider it appropriate to intervene in this case at the current time.
We will continue to monitor the situation closely, and, as part of that, the Prime Minister has asked the national security adviser to review this case. Separately, work is under way to review the wider semiconductor landscape in the United Kingdom. As I am sure the House will appreciate, I am unable to comment on the detail of commercial transactions, or of any national security assessment of a particular case.