Nexperia, a Dutch subsidiary of China’s Wingtech, which is backed by Beijing, became Newport Wafer Fab’s second-biggest shareholder in 2019 but with nobody in Government paying attention, the threat wasn’t spotted.
Then, two years later, with the Welsh company struggling to pay its debts and faced potential bankruptcy, Nexperia launched a full takeover, which the Business Department has been desperately trying to reverse ever since.
The ponderous response has placed further strain and uncertainty on an already struggling company, prompted accusations that “the UK is closed for business” and left the Government facing possible legal action after Nexperia applied for a judicial review.
With the UK distracted, the White House is pulling out all the stops to turbo-boost domestic semiconductor manufacturing and ensure that America can continue to compete with China and Taiwan on the global stage.
During the pandemic, the US was quick to realise two things: the importance of microchips, and the fact that it was overly reliant on overseas suppliers. The resulting chip shortage crippled the American economy, forcing American carmakers to pause production; raised questions about critical military hardware; and led to fears about the reliance of its cyber-security capabilities.
Commerce Secretary Gina Raimondo told a Senate committee that the US faced a supply chain crisis. “Not that long ago, America led the world in leading-edge semiconductor chips. Today we produce 0pc of those chips in America. That’s a national security risk and an economic security risk.”
The escalating threat of a Chinese invasion of Taiwan has further concentrated minds in the West. More than 90pc of the world’s advanced chips come from a single plant in Taipei, belonging to Taiwanese chip titan Taiwan Semiconductor Manufacturing Co.
It also makes about 90pc of the chips vital to products made by US tech firms Apple, Amazon, and Google; and a similar proportion of those used in US military equipment.
Biden’s response to Raimondo’s stark warning was emphatic – the signing of the Chips and Science Act, a comprehensive $280bn state support package.
It included more than $50bn in government loans and R&D tax breaks to revitalise the American semiconductor industry by encouraging foreign producers to build plants on US soil. The European Union equivalent amounts to roughly €43bn of subsidies.
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