View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
17 November, 2022

UK blocks Chinese semiconductor investment

The UK has become the latest country to send a message to China that Europe's semiconductor fabs are not for sale.

By Lara Williams

The UK is the latest country to block Chinese semiconductor investment as the global battle for semiconductor supply intensifies.

The acquisition of the UK’s largest semiconductor fab, Newport Wafer, by Dutch-based technology company Nexperia, a subsidiary of Shanghai-listed Wingtech, is to be reversed on national security grounds. After months of speculation, the UK government made an announcement on 16 November 2022, requiring Nexperia to reverse the acquisition, which saw it acquire a further 86% stake in Newport Wafer in July 2021. This was in addition to its existing 14% ownership, essentially giving Nexperia full control over intellectual property and supply.

Governments around the world are screening against what some describe as an aggressive acquisition campaign by Chinese entities in a bid to control the world’s semiconductor supply. The so-called semiconductor wars have largely played out as a battle of the superpowers: China versus the US. However, the UK’s new edict draws a line in the sand for other Chinese companies looking to acquire further semiconductor manufacturing capacity in the UK.

Similarly, Germany’s government has also reinforced this message to Beijing that Europe’s fab facilities are not for sale. Just a week earlier, on 9 November, Germany’s Minister for Economic Affairs, Robert Habeck, announced that the German government would block Chinese investments into Dortmund-based Elmos and ERS Electronic, citing intellectual property transfer as the reason. Their acquisition by Swedish company Silex Microsystems – a subsidiary of Chinese company Sai Microelectronics – is another example of Chinese companies moving in on foreign semiconductor manufacturing facilities using their overseas subsidiaries.

The German government took a stance earlier in the year, in February 2022, when it blocked the acquisition of its domestic chipmaker, Siltronic, by GlobalWafers, a subsidiary of Taiwanese-headquartered technology company Sino-American Silicon – but its latest move will see the global chip wars intensify to include Europe.

Of the one trillion chips manufactured globally in 2020, Europe only had a 10% share. The European Chips Act, which is working its way through the EU’s legislature, aims to bring that up to 20% of global market share by 2030. The act is expected to be adopted in the first half of 2023 and has already had an impact on major semiconductor companies’ investment decisions, according to the Brookings Institution.

Similarly, the US Chips Act passed on 9 August 2022 demonstrates the US government’s commitment to ensuring the global supply of semiconductor chips does not rely solely on Asian manufacturing bases. In 2021, 75% of semiconductor production took place in east Asia and 90% of the most advanced chips were made in Taiwan.

Free Whitepaper

The Home of Innovation

Food security is a pressing challenge, and the GCC, particularly the United Arab Emirates, has emerged as a food security force. Masdar City, Abu Dhabi, has dedicated programs to support innovation-focused agritech start-ups. To find out more about how the UAE is helping address the world’s food security concerns, download the white paper here.
by Masdar City Free Zone

By clicking the Download Free Whitepaper button, you accept the terms and conditions and acknowledge that your data will be used as described in the Masdar City Free Zone privacy policy By downloading this Whitepaper, you acknowledge that we may share your information with our white paper partners/sponsors who may contact you directly with information on their products and services.

Visit our privacy policy for more information about our services, how we may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Topics in this article:
NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. Data, analysis and deep insights on foreign direct investment delivered to you
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy


Thank you for subscribing to Investment Monitor