British satellite programme 'at risk' from sale of UK tech giant

British satellite programme ‘at risk’ from sale of UK tech giant

The future of Britain’s taxpayer-backed satellite programme has been thrown into doubt by the Chinese-backed takeover of the UK’s biggest microchip plant, MPs have been warned.

Solar cell maker MicroLink Devices said the sale of Newport Wafer Fab to Nexperia had scuppered plans for mass manufacturing of its satellite components in Britain.

It said the blow would leave OneWeb, the taxpayer-funded satellite company, facing supply shortages for its next generation of spacecraft and meaning it could be forced to look abroad.

Kwasi Kwarteng, the Business Secretary, is set to decide this week on whether to reverse the £63m sale of Newport Wafer Fab to Nexperia, which is owned by China’s Wingtech.

A 30-day review of the deal on national security grounds is due to conclude by Thursday. At that point Mr Kwarteng will decide whether to allow the deal to go ahead, block it or impose conditions on the deal. 

The Business Secretary may also extend the review period by another 45 days, a decision that typically means new intelligence has come to light. 

Nexperia acquired Newport Wafer Fab last summer when the plant ran into financial difficulties, but new national security laws give Mr Kwarteng the power to retroactively block the deal.

Toni Versluijs, Nexperia’s UK head, will appear in front of MPs on the Business, Energy and Industrial Strategy Committee on Tuesday. He is likely to be grilled on the Dutch company’s Chinese ownership and its plans for the Newport facility.

However, industry figures have raised concerns that the deal could still weaken Britain’s supply of semiconductors, which are increasingly seen as a key strategic technology.

Newport Wafer Fab was previously operated with an “open foundry” model in which it produced components for multiple customers. 

Under Nexperia the facility is moving to an “integrated” model in which it primarily serves its new owner, who then sells microchips to electronics companies.

MicroLink Devices, which makes lightweight solar arrays for the likes of Boeing and Airbus, said it was in discussions with OneWeb to provide solar power cells to the company’s second generation satellites.

OneWeb, which was bailed out with $500m (£415m) of taxpayer money in 2020, has built its first generation of internet satellites in America but expects the more advanced second generation to be made in Britain from 2025.

MicroLink said that Newport Wafer Fab’s sale had set back its plans to manufacture the cells in the UK. “The original intent was to have a portion of the former Newport Wafer Fab facility fabricate the solar cell wafers,” the company said in a submission to the Business, Energy and Industrial Strategy committee.

“However, when the facility changed hands in 2021, it significantly impacted and forced a change of strategic direction; the change in ownership of NWF essentially closed the possibility of employing a large UK semiconductor wafer processing capability to many technology markets such as advanced solar cells.

“As a result, there is a significant lack of semiconductor wafer processing capability in the UK and significant government support is required to regain this capacity.”

MicroLink said that with growing satellite production, the lack of UK manufacturing meant Britain “will not have access to sufficient advance solar cell supplies to satisfy its national strategic interests”.

Nexperia said: “There is not, and never has been, a compound open access foundry at the Newport site. It is also wrong to suggest that this future possibility does not exist anymore because NWF was acquired by Nexperia.”

It said the previous owners of the factory had been granted rights to acquire a portion of the facility to set up such an open access operation once they secure funding.

OneWeb did not comment.

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