The government’s hawkish policy on foreign investments in British technology is only going to tighten, the boss of chip maker Alphawave has told City A.M.
Computer chip manufacturers have fallen under increasing scrutiny in recent months.
The potential takeover of Newport Wafer Fab by Nexperia, which is owned by a Chinese state-backed company, has raised eyebrows in government after the passing of the National Security and Investment Act earlier this year.
“I don’t think anyone in the semiconductor industry thinks that regulation is going to be eased, especially in a Western environment,” executive chairman John Lofton Holt said. “In this geopolitical climate, it’s not a surprise that law passed.
“It’s expected in this environment. Is it good for tech or bad tech? That’s way above my pay grade, but it is going to make it more difficult to do business globally.”
It follows business secretary Kwasi Kwarteng blocking the purchase of vision sensing technology by Beijing Infinite Vision Technology Co. on Wednesday night, over national security concerns.
However, Western technology companies are poised to navigate tightening regulations, Holt continued.
Alphawave, which launched a £3.1bn float in the UK in May last year, mostly serves the Silicon Valley giants in North America.
After pumping investment into infrastructure at the beginning of the pandemic in 2020, most of Alphawave’s clients are well positioned to come out on top – despite regulations in the UK, as well as in the US and Canada, weighing on the tech industry.
While consumer technology companies will continue to be hit by plummeting demand as inflation eats into people’s spending power, businesses building ‘behind the scenes’ tech such as computer chips have been granted a certain level of immunity, he explained.
“In March 2020, we saw the work from home movement and the infrastructure providers really doubled down on infrastructure investments… These companies are still investing in the infrastructure they’re going to roll out in a few years from now,” Holt said, adding that Alphawave is “really lucky we don’t have a consumer exposure” which is currently being hit by weak demand.