New £51m Investment Boosts Newport Semiconductor Facility

The Welsh government is expressing approval for a significant investment, totaling millions of pounds, made by the American electronics corporation Vishay into the semiconductor facility previously known as Newport Wafer Fab. Last year, Vishay acquired the United Kingdom’s largest semiconductor manufacturing site for £142m, thereby safeguarding over 400 employment positions. This acquisition of Newport Wafer Fab by the American entity followed a directive from the UK government, which compelled its former proprietors to sell due to apprehensions regarding its connections to China. The current proprietors are injecting an additional £51m into the premises situated on the Duffryn Industrial Estate, which has since been renamed Newport Vishay. Rebecca Evans, the Welsh government’s Economy Secretary, stated that this investment demonstrates Wales’s status as “increasingly a world-leading nation” in the field of semiconductor manufacturing. According to the Welsh Conservatives, this development will “burnish Wales’ proud manufacturing credentials.” The semiconductors, also known as chips, produced at this facility are incorporated into millions of electronic devices, ranging from smartphones to domestic appliances and automobiles. The future of the Newport semiconductor facility had previously been a subject of contention, particularly after the former Conservative UK government raised significant national security concerns following the acquisition of the silicon chip plant by Nexperia in July 2021. This technology firm, based in the Netherlands, operates as a subsidiary of Wingtech, which is listed on the Shanghai stock exchange. Following an assessment, the UK government mandated that the company divest its 86% ownership share in the plant due to its affiliations with China. Vishay Intertechnology, recognized as one of the globe’s leading semiconductor producers, completed the outright purchase of the plant in November 2023 for an estimated $177m (£142m), thereby safeguarding over 400 positions. However, this transaction still necessitated national security approval from the UK government, and the corresponding “consent order” was released in March. The consent order formally endorsed the new American ownership, though it included certain stipulations. It is a requirement that the UK government receives notification should Vishay intend to engage in any prospective arrangement involving the sale, transfer, or lease of the factory to any third party that would grant them entry. This £51m investment incorporates £5m contributed by the Welsh government and is projected to introduce novel products and employment opportunities to the Newport-based firm. Evans stated: “Compound semiconductors are all around us – in our homes and in our phones, our trains and our turbines. “They are a vital, if miniature, piece of what makes the modern world tick, with extremely strong global growth projections.”And we in Wales are increasingly a world-leading nation in their production and manufacture.”Today that is more evident than ever, with our international reputation attracting significant inward investment, the provision and occupation of state-of-the-art facilities, clear links with R&D and well-paid opportunities for employment and apprenticeships.”We are now, after a decade of seeding the cluster, reaping the rewards of our commitment which we will continue to drive forward.” The chip manufacturing facility located on Cardiff Road originated as Inmos in 1980, but its ownership has transferred multiple times over the subsequent decades. It stands as the United Kingdom’s foremost producer of semiconductors. Samuel Kurtz, the Welsh Conservative shadow economy minister, commented that the investment in the facility constituted “welcome news that will burnish Wales’ proud manufacturing credentials.” He added, “The vital and secure investment from our allies in the US would not have been possible without the [previous] UK Conservative government’s strategic decision-making.” Vishay’s acquisition of the Newport plant concluded a two-year period of instability, and the recent investment suggests an even more stable outlook. Significant doubts regarding employment prospects had existed before the takeover, prompting employees to undertake several journeys to Westminster to engage with ministers and Members of Parliament. This location holds considerable significance for the Welsh government’s initiatives to foster a semiconductor cluster within south east Wales. Furthermore, this situation illustrates how Wales and its highly-skilled workforce have become entangled in geopolitical dynamics. As observed during the tenure of the previous UK government, the semiconductor sector also carries immense importance for ministers in Westminster, provided that the companies involved are considered secure and appropriate.