Nexperia buys largest UK fab

There’s not much doubt about the biggest industry news story in the UK this week as Nexperia bought out of the largest remaining fab in the country. The Dutch-based, Chinese-owned company took 100% ownership of the Newport Wafer Fab, which will be renamed Nexperia Newport. The purchase makes a lot of sense for Nexperia. The company relies on volume, claiming to ship 16 billion devices every year. With the ongoing chip supply crisis, especially in the automotive sector, adding a working, equipped fab with highly experienced personnel for a basement price of a rumoured £63m seems like a bargain.

The Newport semiconductor fab opened in 1982 and was originally part of INMOS. Its current capacity is over 35,000 200 mm wafer starts per month covering a wide range of semiconductor technologies ranging from MOSFETs and Trench IGBTs using wafer thinning methods to CMOS, analogue and compound semiconductors. The acquisition will improve the company’s automotive-qualified product supply capability and its market share in that sector and others. The almost half a million wafers a year capacity will be a blessing to Nexperia as it tries to keep up with customer demand. It was already a customer of Newport, but having control of the fab’s full capacity and the production schedule of the plant will be invaluable.

The fab will support Nexperia’s $10bn USD plans for growth in the industry and expand the company’s offerings of IGBT, Analog and compound semiconductor technology. The growth plan also includes updating the Manchester and Hamburg wafer fabs.

It is a boon for what is an an area of Wales that has previously suffered a loss of manufacturing jobs as the Operations Director at the Newport site, Paul James comments, “The acquisition is great news for the staff here in Newport and the wider business community in the region as Nexperia is providing much-needed investment and stability for the future. We are looking forward to becoming part of the global Nexperia team and are keen to keep the current workforce. Additional local resources may be required too. We are also pleased that we will be able continue to contribute to the local ecosystem.”

With the economy still in recovery after the Covid pandemic and Brexit putting a strain on manufacturing, Nexperia’s show of confidence in the Welsh economy is encouraging. After the initial Brexit vote, Nissan threatened to pull out of the UK completely unless the supply chain was strengthened. Nexperia’s plans to manufacture automotive components in Newport could encourage other suppliers to locate nearby, further boosting the UK’s supply chain.

Despite some of our press trying to create some outrage over the nationality of Nexperia’s owners, the news is a vote of confidence in the workforce in south Wales and a real positive for the manufacturing and electronics sectors.