News: Microelectronics
6 March 2024
Vishay completes acquisition of Nexperia’s Newport Wafer Fab following UK Government approval
Discrete semiconductor and passive electronic component maker Vishay Intertechnology Inc of Malvern, PA, USA has completed its acquisition of the wafer fabrication facility and operations in Newport, South Wales, UK of Netherlands-based Nexperia B.V. for about $177m in cash on hand (net of cash acquired).
Located on 28 acres and with the capacity to produce more than 30,000 200mm-diameter wafers per month, the automotive-certified facility is the UK’s largest semiconductor fab, with a long history of supplying components to the automotive and industrial markets. Vishay aims to position the facility as a “manufacturing excellence center focusing on net-zero transformation of decarbonization and electrification”. As a new member of the Compound Semiconductor Cluster in South Wales, Vishay plans to collaborate with local universities and others in the UK to enhance its R&D on power compound semiconductors.
Picture: Newport Wafer Fab.
“The acquisition of Newport aligns with the strategic shift the board envisioned with its decision to appoint new leadership [in early 2023],” says Vishay’s executive chairman Marc Zandman.
“Vishay set an ambitious goal of investing approximately $1.2bn in capacity over a three-year period in order to position the company to seize the opportunities created by the megatrends of e-mobility and sustainability needed for a Net Zero economy,” said president & CEO Joel Smejkal on 8 November, when Vishay announced the acquisition. “While this transaction is supplemental to our capex investment strategy, adding Newport Wafer Fab to our manufacturing footprint will be instrumental to achieving our goal of expanding capacity for our customers and to accelerating our SiC [silicon carbide] strategy,” he added at the time. “Our goal is to safeguard the positions of the highly skilled and dedicated employees and to invest the necessary capital to set up production for our SiC trench MOSFETs and diodes. With its solid balance sheet and ample liquidity, Vishay will immediately bring stability and its reliable cash flow generation to ensure the facility becomes a fully operational and profitable fab,” he reckoned.
“Vishay is making this shift, investing in technologies and incremental capacity to drive faster growth and enhance returns to stockholders. The goal is to prepare Vishay to capitalize on the megatrends of e-mobility, sustainability and connectivity,” says Zandman.
“With a Vishay-owned fab to qualify and scale our SiC portfolio, we are accelerating our participation in the SiC MOSFETs and diodes marketplace, as desired by our customers,” says Smejkal. “In late 2022, the MaxPower acquisition advanced our SiC intellectual property and MOSFETs product technology. We are excited to further develop our SiC and GaN [gallium nitride] technology as a new member of the Compound Semiconductor Cluster in South Wales,” he adds.
“Vishay is committed to investing in Newport to grow capacity, and to accelerate our SiC and GaN production and technology development,” says Smejkal. “We are now preparing to share our plans for Newport at our upcoming Investor Day on 2 April.”
To affect the transaction, Vishay acquired the legal entity Neptune 6 Ltd, and its operating subsidiary Nexperia Newport Ltd, which owns and operates the Newport facility. Neptune 6 Ltd is expected to be renamed Vishay UK Holdings Ltd and Nexperia Newport Ltd is expected to be renamed Vishay Newport Ltd.
UK government approves acquisition
Completion of the acquisition comes after the UK Secretary of State in the Cabinet Office on 1 March made a final order under section 26 of the National Security and Investment Act 2021 regarding acquisitions of control over entities and assets in (or linked to) the UK that may pose national security risks. Netherlands-based Nexperia B.V. is a subsidiary of China-based Wingtech Technology Co Ltd.
Previously, on 5 July 2021, Nexperia had acquired an additional 86% of the shares of what was then Newport Wafer Fab (NWF), taking its stake to 100%. Nexperia was a customer of Newport Wafer Fab’s foundry services and became its second largest shareholder in 2019. The Newport site complemented Nexperia’s other European manufacturing operations in Hazel Grove, Manchester, UK, and Hamburg, Germany.
However, in November 2022 the UK Government’s Secretary of State for Business, Energy and Industrial Strategy (BEIS) determined that the acquisition constituted a trigger event under section 8(2)(c) of the Act, as it presented a risk to national security relating to:
- technology and know-how that could result from a potential reintroduction of compound semiconductor activities at the Newport site, and the potential for those activities to undermine UK capabilities; and
- the location of the site could facilitate access to technological expertise and know-how in the South Wales-based compound semiconductor cluster, and the links between the site and the Cluster may prevent the Cluster being engaged in future projects relevant to national security.
A “necessary and proportionate” measure to mitigate the risk to national security required Nexperia to sell at least 86% of Nexperia Newport Ltd.
The final order allowing completion of the acquisition of the former Newport Wafer Fab from Nexperia is subject to the condition that Vishay, its subsidiary Siliconix or their subsidiaries must inform the Secretary of State in advance of completing any agreement to sell, transfer, grant a lease or licence any part of the Newport site to any third party. This is since the Secretary of State “reasonably considers that a risk to national security would arise should sensitive intellectual property, expertise and/or other sensitive information relating to compound semiconductor design, research and development or manufacturing at the Newport site, including their dual-use applications, become accessible to third parties”.
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