One of Wales' leading tech facilities and the biggest chip maker in the UK is being acquired by a US tech giant in a £144m cash deal. Nexperia, which is ultimately-owned by Chinese and Shanghai listed Wingtech Technology, has struck a deal for its facility in Newport to be acquired by US and New York listed Vishay Intertechnology.
The American firm plans to invest £1bn into the 200m semiconductor wafer fab over the next three years to take advantage of demand for semiconductors in areas like electric vehicles as well as from the wider drive to net zero. It said a takeover will ensure its profitablity, while cementing its position as a vital clog in the emerging south Wales compound semiconductor cluster.
Previously, the UK Government ruled that following a protracted review, Nexperia sell the facility on national interest and security grounds under the National Security and Investment Act. Amsterdam-based Nexperia acquired a 100% interest in the business from former owner Neptune Six for £63m two year ago. It was previously known as Newport Wafer Fab, before being renamed Nexperia Newport.
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While first indicating that it would appeal against the divestment ruling of the UK Government, Nexperia appointed Seattle-based advisors ATREG to sell the facility. Subject to UK Government review, the purchase rights of a third party, and customary closing conditions, the deal is expected to be finalised early next year.
President and chief executive of Vishay, Joel Smejkal, said: “By agreeing to acquire Newport Wafer Fab, our goal is to safeguard the positions of the highly skilled and dedicated employees and to invest the necessary capital to set up production for our SiC Trench MOSFETs and diodes. With its solid balance sheet and ample liquidity, Vishay will immediately bring stability and its reliable cash flow generation to ensure the facility becomes a fully operational and profitable fab.
“Acquiring Newport Wafer Fab brings together our capacity expansion plans for our customers in automotive and industrial end markets as well as the UK’s strategic goal of improved supply chain resilience. In addition to expanding capacity, we intend to collaborate with the compound semiconductor Cluster in South Wales and to join with key stakeholders committed to developing the semiconductor industry in the UK including university and community partners in the UK and particularly South Wales.
“We look forward to welcoming Newport Wafer Fab’s employees into Vishay and to partnering with local authorities and the Welsh and UK governments to both ensure long-term growth for the fab and deliver value to our customers and stockholders.” Vishay manufactures one of the world’s largest portfolios of discrete semiconductors and passive electronic components that are essential to innovative designs in the automotive, industrial, computing, consumer, telecommunications, military, aerospace, and medical markets.
Its executive chairman Marc Zandman said: “shay’s Board made a critical decision last year to pivot the company toward profitable growth under new leadership, leveraging the company’s solid cash flow generation, sound operational capabilities and broad product portfolio
"A key element of this strategic shift is the investment in technologies and incremental capacity to position Vishay to capitalize on the megatrends in e-mobility and sustainability. Acquiring Newport Wafer Fab demonstrates Vishay’s commitment to executing this strategic shift, and to realizing improved returns for our stockholders.”
Toni Versluijs, country manager, Nexperia UK, said: “Nexperia would have preferred to continue the long-term strategy it implemented when it acquired the investment-starved fab in 2021 and provided for massive investments in equipment and personnel. However, these investment plans have been cut short by the unexpected and wrongful divestment order made by the UK Government in November 2022.
“The UK Government’s order, in combination with a weakness in the global semiconductor market, recently led us to announce the intention to reduce the number of employees at the site by at least 100. The site needs clarity about its future to avoid further losses, and today’s announcement provides this.
"Of all options, this agreement with Vishay is the most viable one to secure the future of the site as Vishay – like Nexperia – has a solid customer base for the fab’s capabilities. For the site, Vishay’s commitment to further make the Newport Wafer Fab a success story is encouraging. Nexperia’s position with regards to the UK Government’s order remains unchanged.”
Economy Minister Vaughan Gething said: “We welcome the announcement that Vishay is investing in the thriving semiconductor cluster in Newport. This is a great example of a Welsh economic strength with truly global reach attracting major global investment.
“Global demand for semiconductors is set to explode in the coming years and Newport is perfectly placed to turn that growth into more long term, quality careers. The committed, skilled workforce which Wales already boasts, with strong buy in from academic, business, local and Welsh Government partners, makes this a great, ambitious place to invest.
“We are pleased to see Vishay’s intention to grow the workforce and further invest significant amounts in the Newport facility. This should end a period of uncertainty and we look forward to seeing the UK Government commit to support the Newport site in line with the UK semiconductor strategy.”
Welsh Conservative Shadow Technology Minister, Natasha Asghar MS said: I welcome the news that Newport Wafer Fab has been bought, safeguarding hundreds of Welsh jobs with the additional benefit of quelling concerns about a China-backed company holding a stake in a vital British industry.
“The Prime Minister was right to intervene in his appointment of a National Security Advisor to examine the previous purchase and I am confident that the future of the domestic microchip industry is further secured by this news. As a resident of Newport, without a doubt there has been a lot of uncertainty in relation to the future of the Wafer Fab site and now I hope that this acquisition helps the Wafer Fab site not only survive but thrive on a local, national and international platform.”
