UK probes takeover of its biggest chip plant by Chinese-owned firm

The UK national security advisor will examine Chinese-owned Nexperia NV's takeover of Welsh-based Newport Wafer Fab after lawmakers said it could threaten the country’s high-tech future.

Newport Wafer Fab, the country’s biggest semiconductor plant, makes semiconductors mainly for the car industry but has been focusing on more advanced compound semiconductors used in 5G and facial recognition. The company has strong ties to many universities in the UK.

Prime Minister Boris Johnson had asked the National Security Adviser to review whether the deal has real intellectual property value and interest to China and its security implications.

The UK government has 30 days under its Enterprise Act to either call in the deal for scrutiny or allow it to proceed.

The Enterprise Act, which was passed this year, gives sweeping powers for the government to intervene if takeovers may threaten national security.

Ministers have five years to scrutinize transactions and could unpick them if found to be a threat.

Conservative Party leader Iain Duncan Smith said the UK government needs to call in and block the deal, which is an investment disaster.

While Johnson has blocked China’s Huawei Technologies Co. from the UK's 5G wireless rollout, he intended to take a lighter-touch approach with chip industry deals.

Nexperia’s parent company Wingtech Technology Co. Ltd. said the deal faces “uncertainties.”