Nexperia confirms the acquisition of Newport Wafer Fab, the largest chip company in the UK

According to the latest US CNBC report, Nexperia, a Dutch chip company under China's Wingtech Technology, confirmed on Monday that it plans to acquire Newport Wafer Fab, the largest chip company in the UK.

Earlier, two people close to the deal told CNBC on Friday that the acquisition will be officially announced early this week.

In 2019, Nexperia, which became the second-largest shareholder of NWF, stated that the acquisition will help the company manufacture more chips and meet the soaring demand. According to the data, Newport Wafer Fab is located in Newport, South Wales. The factory was founded in 1982 and is the largest remaining semiconductor factory in the UK.

Achim Kempe, chief operating officer of Nexperia, said in a statement: “The Newport Wafer Fab plant has a very skilled operations team that plays a vital role in ensuring continuity of operations. We look forward to creating the future together.”

The financial details of the transaction were not disclosed, but two CNBC sources said that the transaction value was approximately 63 million pounds (87 million U.S. dollars, or approximately 564 million yuan).

Nexperia’s £63 million purchase price for NWF is much lower than the US$900 million that Texas Instruments announced last week for Micron’s factory.

Forrester analyst Glenn O'Donnell told CNBC: “The £63 million fab price is trivial.” “Most fabs cost far more than £1 billion. Even if it’s an older technology, the deal It's also ridiculously cheap."

An overseas source said that the NWF has several outstanding debts, including HSBC’s 20 million pounds and the Welsh government’s 18 million pounds, adding that these will be repaid after the sale.

At the same time, according to a person familiar with the matter, CEO Drew Nelson, who became the majority shareholder of NWF after acquiring the NWF business from Germany's Infineon four years ago, will receive about 15 million pounds.

NWF produces silicon chips for power applications in the automotive industry, which has been particularly hard hit by the shortage of chips. The company has also been developing more advanced "compound semiconductors" that are faster and more energy-efficient.

According to the person familiar with the matter, according to the transaction, Nelson was allowed to divest the compound semiconductor portion of NWF, and he plans to reinvest the proceeds in this new enterprise. He was also allowed to keep the name of Newport Wafer Fab.

A spokesperson for the Welsh government said: “Today’s announcement will secure 400 jobs and will make further major investments in the facility, including the purchase of new equipment to develop the business. As part of this, the Welsh government will recover its initial investment and interest ."