China says the United Kingdom abused state power to undo the deal with the chip factory

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(Bloomberg) – China said the UK overstepped its authority and violated the rights of Nexperia Holding BV when the government decided to reverse the company’s takeover of a semiconductor factory in Wales.

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“The UK has stretched the concept of national security too far and abused the power of the state to interfere directly with the normal investment cooperation of a Chinese company in Britain,” said the spokeswoman for China’s foreign ministry. , Mao Ning, Friday to reporters at a regular press briefing. “This violates the legal rights and interests of the company involved and the principles of the market economy and international trade rules, which the company has long claimed to be a champion of.”

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British company secretary Grant Shapps on Wednesday instructed the owner of Nexperia, Shanghai-listed Wingtech Technology Co., to sell Newport Wafer Fab. Nexperia bought the UK’s largest microchip factory last year. The Chinese company has announced that it will appeal the decision.

Read more: UK blocks China-led buyout of largest microchip factory

Wingtech’s Dutch subsidiary will be forced to sell the 86% of Newport Wafer Fab it bought in July 2021, in a deal worth around £63 million ($75 million), a person familiar with the matter said at the time. It held a minor stake prior to that date, before the new UK takeover rules came into effect. The facility makes silicon “wafers” that are then converted into semiconductors in applications such as automobiles.

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After a lengthy investigation, UK officials concluded that there was a risk to national security due to the site’s potential to produce compound semiconductors, which could be useful for electric vehicles, 5G and facial recognition, “and the potential for those activities to undermine British capabilities”. according to government orders.

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