Nexperia's Long History, Tangled Present and Uncertain Future

Whilst the world and its money is focused on the possibilities offered by AI, it’s easy to miss interesting events elsewhere. One such development happened this week in the Netherlands.

‘Takes control’ is shorthand for a number of actions including suspending CEO Zhang Xuezheng from his role and his board seat. The rationale for these actions?

It’s not the first time that Nexperia has been at the centre of concerns about Chinese ownership. In 2021 Nexperia bought Newport Wafer Fab in Wales in the UK. This Fab was the original UK base of parallel computing pioneer Inmos, whose groundbreaking Transputer we’ve discussed in previous posts.

Newport Wafer Fabs sale to Nexperia led to challenges from lawmakers in the U.S.

In a letter sent to President Joe Biden on April 19, 2022, the Republican-led, special congressional task force known as the China Task Force (CTF) expressed concerns over the takeover of Newport Wafer Fab (NWF) … the letter raised questions regarding Nexperia’s ownership by Wingtech Technology (Wingtech) of the People’s Republic of China (PRC), claiming that Nexperia is “in effect a PRC state-owned enterprise.” Research cited in CTF’s letter suggests that the Chinese government owns at least 30 percent of Wingtech Technology’s shares.

The British Government would ultimately block the deal:

The British government has blocked the takeover of the UK’s largest producer of semiconductors by a Chinese-owned manufacturer, citing “a risk to national security”.

The business department’s decision on Wednesday comes more than a year after semiconductor company Nexperia first announced that it had taken control of Newport Wafer Fab in south Wales in July 2021, in a £63m deal.

A sale price of £63m seems like ‘small beer’ compared to the trillions being invested in AI chips, so what was all the fuss about?

who writes the terrific Substack, in addition to his day job on the UK’s Sky TV, explains that the Newport Fab makes ‘power semiconductors’ and does it well:

So, a mark of a fab’s success is its average yield, and it turns out on this front Newport is very good indeed.

With a yield percentage in the very high 90s, among power silicon chipmakers it’s one of the best in the world.

The other thing that’s under-appreciated is how valuable this site is.

If you wanted to tear down this building and reconstruct it, with all the machinery, it would probably set you back about