A REVIEW looking into the national security concerns surrounding the takeover of a Newport tech firm has yet to take place, according to the Commons Foreign Affairs Committee.

Last July, prime minister Boris Johnson said that national security adviser Sir Stephen Lovegrove would be tasked with examining the purchase of Newport Wafer Fab by Chinese backed Nexperia for a reported £63 million.

The sale to the Dutch firm was seen as controversial, as it has heavy ties to the Chinese government, and there is some belief that the sale could compromise national security.

In a report published by the Foreign Affairs Committee today - Tuesday, April 5 - it has been claimed that this security review has allegedly “not begun”.

It comes just days after reports surfaced that the takeover had quietly received government approval – claims which Nexperia distanced themselves from.

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The strategic value of Newport Wafer Fab has been made clear in the report, as the Duffryn plant is involved in the manufacturing process creating semiconductors – a critical component in microchips which are used in everything from mobile phones, to the data centres which power the internet.

And, amid a global shortage, there is a widespread fear that China is currently working to stockpile these assets for themselves.

What has been said in today’s report?

The Commons Foreign Affairs Committee said the sale of Wafer Fab to a “company with links to the Chinese Communist Party” had resulted in one of the UK’s “prized assets” going to a “strategic competitor”, and could potentially compromise national security.

In a report – Sovereignty For Sale: Follow-up To The Acquisition of Newport Wafer Fab – published on Tuesday, the committee’s MPs questioned why the UK Government had not used powers in the National Security and Investment Act to intervene.

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The Act, which came into force in January, affords ministers the right to step in on business matters “where there is a risk to national security”.

Tom Tugendhat, Tory chairman of the committee, said: “The prime minister’s assurances that work is under way are welcome.

“However, so few details have been provided to the committee, that we are left with the unfortunate conclusion that no review has taken place.

“Today, the committee is calling on the Government to clarify the reasons why the prime minister requested a review in Newport Wafer Fab and why this review has not begun.

“The Government has the tools, it just needs to use them.”

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

How did we get here?

In July 2021, Newport Wafer Fab was sold to Dutch firm Nexperia.

However, Chinese firm Wingtech Technology has a controlling stake in it, and leading political figures have previously claimed that the Chinese government are seeking to gain a monopoly on what is a highly specialised industry.

The Newport plant is involved in the technology required to make compound semiconductors - important components for devices including Apple iPhones and Wi-Fi technology.

As part of this deal, a £17 million debt owed to the Welsh Government by Newport Wafer Fab was paid off.

At the time, former Conservative leader Sir Iain Duncan Smith warned that the government is in an “unholy mess” over its approach to business deals involving China.

It is understood that Newport Wafer Fab employs 450 people in the city.

  • Additional reporting by Patrick Daly, PA Political Correspondent

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