Computer chip investors are reportedly drawing up plans for a rescue bid of Newport Wafer Fab, should its £63m takeover by Nexperia be blocked by the government.
The co-founder of Headlight Technology Partners, which focuses on semiconductor investments, Alex Stewart, told the Telegraph that the newly established fund wants to “try and be part of helping Newport Wafer Fab” should the bid fall through.
Founders of the fund are also in discussions with former Imagination Technologies boss Ron Black, who is reported to have set aside £300m to buy and grow Britain’s largest chip manufacturer.
“Headlight is pulling together a significant fund and as we have the same passion for helping the UK to excel in semiconductors, we have been in discussions as to the best way to collaborate,” said Black.
Business secretary Kwasi Kwarteng is expected to publish his decision on the deal on 5 September following a 45-day extension.
The deal for Newport Wafer Fab by Nexperia, which is owned by a Chinese company called Wingtech, was was completed last year. However, the government retroactively blocked the takeover in May under the National Security and Investment Act, which passed at the beginning of the year.
Before the law was passed, Black had urged that all technology deals be “strongly considered on national security grounds”.
“What we’re looking to do is to provide an alternative to the current deal if either Nexperia or the government conclude that an alternative is necessary,” Black told The Telegraph last year, when he first revealed he was working on his own takeover proposal.
Black said at the time he had been working with three electronics companies and three financial investors, based in the UK, Europe and the US.
Kwarteng’s decision on the deal is long overdue, semiconductor bosses have said previously.
CEO of British semiconductor startup Paragraf, Simon Thomas, told City A.M. on Friday: “Not making the decision is more damaging than making the wrong decision sometimes.”
Thomas described the looming national security review as the “elephant in the room” as industry waits for the government to publish its national semiconductor strategy, which is expected this autumn.
Toni Versluijs, UK managing director at Nexperia, also said last week that the government should approve the sale of the country’s biggest chipmaker to Nexperia if it wants to build a “healthy” semiconductor industry.