Anger mounts over sale of Welsh microchip maker to Chinese-owned firm

Ministers are facing fresh calls to intervene in the Chinese takeover of a Welsh microchip maker amid a row over national security.

Boris Johnson instructed National Security Adviser Sir Stephen Lovegrove to investigate the £63million buyout of Newport Wafer Fab by a Chinese-owned firm last year.

Last week it was claimed Lovegrove has looked into the deal but concluded it posed no threat. But Parliament’s foreign affairs committee said there was so little evidence that Lovegrove had done so that it was left with ‘the unfortunate conclusion that no review has taken place’.

Boris Johnson instructed National Security Adviser Sir Stephen Lovegrove to investigate the £63m buyout of Newport Wafer Fab by a Chinese-owned firm last year

The row has put Business Secretary Kwasi Kwarteng under even more pressure to use new powers to intervene and unwind the takeover.

Kwarteng is understood to be considering using the new National Security and Investment Act which allows ministers to call in buyouts of strategic companies even after they have gone through.

An investigation could be launched within months, though it is thought it would focus more on the impact of the sale on Britain’s manufacturing industry than national security.

But, as the law came into force in January, critics have been left confused about why he has not already stepped in.

Newport Wafer Fab is the UK’s biggest producer of microchips, which are an essential part of all electronic devices.

Dutch group Nexperia – which is owned by Chinese firm Wingtech and has links to the Communist Party in Beijing – took over Newport Wafer Fab last year.

Tom Tugendhat, chairman of the foreign affairs committee, said: ‘For over a year, the committee has voiced its concern over the takeover of semiconductor manufacturer Newport Wafer Fab.

‘Semiconductors are essential to every aspect of modern life and Newport Wafer Fab is one of the country’s leading manufacturers.

‘Their takeover by Nexperia left many wondering why we are, seemingly, handing over critical security infrastructure to overseas companies with well-documented links to the Chinese state.’

The committee asked the Government to clarify why Lovegrove was asked to inspect the deal and why he ‘did not undertake such a review’.

The MPs said they were ‘extremely concerned about the Government’s apparent lack of appetite to use the powers at its disposal to protect British companies in this industry’.

Former Conservative party leader Sir Iain Duncan Smith said yesterday: ‘It beggars belief that the Government is going to stand idly by whilst Nexperia, a Chinese-controlled company, attempts to take over Britain’s largest microchip factory.’

A Government spokesman said: ‘The Government is considering the case and no decisions have been made.’