UK should ask for TTC invite for good of semiconductor industry: lawmakers
In a recent report on the importance of the semiconductor industry, UK lawmakers have said that while the country ‘is an important part of global semiconductor supply chains…it is reliant upon other countries,’ and that while it will not have an end-to-end supply chain for semiconductors, ‘it has tradeable strengths.’ Consequently, the report’s authors say, the UK government should work ‘more closely with allies in the EU and US, and elsewhere, to safeguard security of supply, both of finished products and of the materials needed for production in the UK.’
As such, the report suggests, UK government should consider whether closer working between the UK and allies in the EU and US, could be ‘effectively delivered by requesting that the UK be invited to take part in relevant parts of the EU-US Trade and Technology Council (TTC).’
The report asks ministers to set out the government’s position on whether a new multi-lateral organisation for industrial collaboration between allied democratic countries is required and, if not, ‘which existing multi-lateral organisation provides the opportunity for this important work to be undertaken.’
Noting that ‘Some foreign acquisitions of UK semiconductor firms – or attempted acquisitions – have gained notoriety,’ the report sets out aspects of a number of such takeovers, including the ‘controversy that currently surrounds the acquisition of the Newport Wafer Fab (NWF) in 2021 by Nexperia, a company registered in the Netherlands but owned by Wingtech Technology, a Chinese firm.’ The report cites a previous committee report which concluded that, ‘Failure to conduct a detailed assessment of this transaction under the National Security and Investment Act would indicate that the Government continues to hold an unrealistically optimistic understanding of the Chinese government’s intentions and is prioritising short-term commercial interests over the long-term security of our country.’
Nexperia ‘shocked’ by divestment order
On 16 November, the UK government announced that Nexperia’s acquisition of NWF ‘was a trigger event’ under the National Security and Investment Act of 2021. The government said, ‘[T]echnology and know-how that could result from a potential reintroduction of compound semiconductor activities at the Newport site, and the potential for those activities to undermine UK capabilities; and…the location of the site could facilitate access to technological expertise and know-how in the South Wales Cluster, and the links between the site and the Cluster may prevent the Cluster being engaged in future projects relevant to national security,’ as it ordered that Nexperia BVL must sell at least 86% of its acquisition.
In a statement, Nexperia said:, ‘Nexperia does not accept the potential national security concerns raised. The Company proposed far-reaching remedies to BEIS’s Investment Security Unit that fully address even these potential concerns. Nexperia offered, amongst others, not to conduct the compound semiconductor activities of potential concern and to provide the UK Government with direct control and participation in the management of Newport. There has been no dialogue between the Government and Nexperia on these proposals. The Government has not visited Newport, has not spoken with the over 500 employees whose jobs are now at risk, and none of the three responsible Secretaries of State have responded to Nexperia’s requests for dialogue.’
