Wingtech Technology Finishes Acquisition of U.K.’s Largest Chip Plant

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(Source: VCG)

Wingtech Technology, a Chinese chip making giant, announced on Monday that its subsidiary Nexperia had completed the acquisition of British chip manufacturer Newport Wafer Fab (NWF).

On July 5, the Dutch chip firm Nexperia signed an acquisition agreement with NWF. News of the deal immediately attracted the attention of the industry and many foreign media outlets. British Prime Minister Boris Johnson has ordered a security review of the acquisition.

After the acquisition, Nexperia will acquire 100% ownership of NWF and its technologies in compound semiconductors and other fields. Wingtech’s closing price rose by 1.21% to 107.59 yuan ($16.6) per share, with a total market value of 133.958 billion yuan.

Nexperia, formerly a standard product business unit of NXP, a Dutch semiconductor firm, was acquired by Wingtech in 2019. Nexperia can deliver more than 90 billion products every year.

Established in 1982, NWF is the largest wafer factory in the UK, with a monthly wafer production capacity of about 32,000 units. According to NWF’s official website, its chips are mainly 0.7 μ m to 0. 18 μ m. CNBC has reported that NWF has more than a dozen British government contracts worth 55 million pounds, some even involving radar system chips for combat use.

Regarding this acquisition, Drew Nelson, the outgoing chairman of NWF, commented, “This acquisition gives NWF the opportunity to continue to develop emerging composite semiconductor technologies, and NWF will become an important part of the composite semiconductor cluster in South Wales.”

In late July, Ron Black, former CEO of Imagination Technologies, a British GPU manufacturer, gathered six companies and announced that he wanted to bid for NWF. In August, three more companies joined. These British enterprises planned to raise $300 million to keep NWF from being acquired by the Chinese tech firm.

However, NWF has a high debt load which inhibits some of its research and development capability and long-term strategy. The Daily Telegraph reported that in order to obtain orders and investments from Nexperia, NWF had to use the company as collateral. This acquisition is also caused by its failure to fulfill its contractual obligations.

At present, Nexperia has fully repaid NWF’s debt of 17 million pounds to the Welsh government, and will continue to invest in the company.

In April this year, Wingtech announced that it would invest 12 billion yuan to build a wafer factory in Shanghai, which is expected to be put into operation by July 2022 with an annual output of 400,000 wafers. In June this year, Nexperia planned to invest $700 million in the next 12 to 15 months to expand its European fabs, Asian packaging and testing centers, and global R&D bases.

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