The UK Prime Minister today announced a security review of the acquisition by China backed Nexperia of the UK's largest silicon wafer manufacturer. 

Newport Wafer Fab is one of a number of semiconductor supply chain companies in in South Wales which the regional Welsh government hopes to expand.  However it is unclear whether the Government intends to use its existing public interest intervention powers (PIIN) under the Enterprise Act to do so.  

The much covered National Security and Investment Act, is yet to come into force but covers semi-conductors as an explicit sensitive sector, requiring mandatory notification.  

Semi-conductors have become a significant foreign investment battleground at a time when there is a global shortage: resulting in car makers experiencing knock on supply chain difficulties.  If a PIIN is served, Nexperia will join the growing list of global reviews of semi-conductor and related sector deals: Nvidia's acquisition of ARM, a UK chip designer, is currently under review in the UK, China and a number of other jurisdictions from a competition and national security perspective, Renesas' acquisition of Dialog Semiconductor plc was announced earlier in the year and undergoing regulatory reviews and in Germany the Ministry of Economy is reviewing Global Wafers proposed acquisition of Siltronic (which is like Newport active in wafers)  In the US, CFIUS called in (and pending completion of the CFIUS process, suspended) the acquisition by Wise Road Capital, a China-based PE fund, of Magnachip Semiconductor Corporation, a South Korea-based, but US-listed semiconductor company. Notably, Magnachip had seemingly undertaken a number of steps to reduce/eliminate its presence in the US to avoid CFIUS jurisdiction, but CFIUS disagreed with the sufficiency of those steps.  Co-incidentally, Nexperia was previously owned by Wise Road Capital according to the South China Morning Post.

The UK Foreign Affairs Committee has recently announced a select committee inquiry into the interaction between technology and foreign policy: 

"The emergence of new technologies and the power wielded by tech firms changes the role of the UK as a global rule-setter and the work of our diplomatic networks. This inquiry will explore how the FCDO can innovate in its approach to diplomacy on a world stage that is being rapidly reshaped. The old rules of trade and diplomatic engagement were written on the basis of British norms, putting the UK at the heart of the international system. These developments present significant challenges to the UK’s security, prosperity, diplomatic relations and global influence and the FCDO must adapt quickly and accordingly.”