UK Research and Investment (UKRI) suspended grants to Newport Wafer Fab on government instruction after its sale to Nexperia, The telegraph understands.
It comes after it emerged that the company had been involved in more than a dozen state-backed projects before it was sold to Nexperia, including a £ 5.2million defense initiative.
Earlier this month, Dutch company Nexperia took control of South Wales-based Newport Wafer Fab.
The Dutch company is owned by Wingtech, a Chinese company partly owned by Beijing-backed investors.
Boris Johnson has ordered Sir Stephen Lovegrove, the national security adviser, to review the deal, with a decision expected in a few weeks.
Pressure on the government to take action increased yesterday after it emerged that Newport Wafer Fab was part of a program to use advanced semiconductor technology to support radar and satellite systems in pointe, alongside defense companies Leonardo, MBDA and Arris.
In total, Newport Wafer Fab is involved in more than a dozen government-funded programs worth around £ 55million, according to a source close to the deal.
“Britain has funded research that makes Newport Wafer Fab a key partner in a UK government defense project. This is why we need a full review of the decision for national security reasons, ”said Tom Tugendhat, chairman of the Special Committee on Foreign Affairs, who called for further consideration of the deal.
In 2019, Newport Wafer Fab, Cardiff University, aerospace companies and the state-funded Compound Semiconductor Applications Catapult received £ 2.4million from the Welsh government, as well as £ 2.8 million pounds of their own money, to develop high frequency chips. for use in communication systems such as radar and 5G networks. It has been described as a project to strengthen the UK supply chain in components.
It’s unclear whether the project, first reported by CNBC, will move to a spin-off company set up by Drew Nelson, which sold Newport Wafer Fab to Nexperia two weeks ago. The factory is believed to have played a relatively small role in the project.
Newport Wafer Fab was bought for around £ 65million after Nexperia exercised contractual rights to the company it secured in 2019. Ministers had assessed the deal on national security grounds, saying it there was no reason to block it, but Mr. worried about the sale.
Nexperia has said it is willing to resolve any issues and said it has a large and diverse set of shareholders.