China Strikes Back: Newport Wafer Fab Closure & Micron Investigation Explained

11-04-2023 | By Robin Mitchell

As the West continues to tighten restrictions against China’s access to semiconductors, China has started to fight back with the development of its own semiconductor tools, launching probes into Western facilities like Micron Technology located in China and even threatening jobs in the West via fab closures such as Newport Wafer Fab, owned by Chinese company WingTech through Nexperia, and raising national security concerns with the UK government. This struggle impacts supply chains, automotive-grade parts, and military-grade hardware production while also posing risks of industrial espionage, IP theft, and falling stock values for Western companies hesitant to establish new foundries and facilities in China due to escalating cybersecurity risks. Why does Newport Wafer Fab risk closure, why is China looking into Micron, and what does this mean for the West?

Newport Wafer Fab could close if sold off – China

Over the past year, we at Electropages have continued to report on the Newport Wafer Fab dilemma, which has seen the parent company, WingTech, ordered to sell the semiconductor fab by the UK government over national security concerns. 

For those who want the TDLR version of this ongoing story, Newport Wafer Fab is a semiconductor production facility located in Wales that was recently purchased by Nexperia, whose parent company is WingTech, a Chinese company. As securing the supply of semiconductors in the West has become a top priority, the sale of Newport Semiconductor Fab raised all kinds of red flags within the UK government and, after a short investigation, ordered WingTech to sell the semiconductor manufacturer. While Newport Wafer Fab itself doesn’t produce next-generation tech, it does have the ability to produce advanced analogue components, and the combination of this technology, along with access to customer IP could put western customers of the fab at risk. At the same time, if Newport Wafer Fab restarts work on compound semiconductors, it could give China an edge over the West in this emerging field of semiconductors.

However, recent events in the ongoing struggle between WingTech and the UK government have indicated that the sale of the fab could see its closure, as account filings by the fab show that a significant portion of its losses is being absorbed by the parent company. Currently, the losses for Newport Wafer Fab have been listed as $15.1 million since the acquisition by Nexperia, compared to $17 million in 2020. As such, Nexperia reported that the sale of the fab could see the site’s closure and the loss of over 400 jobs, along with losses of up to $210 million. 

China to Investigate Micron Technology over national security concerns

As China continues to face growing pressure from the West, it comes as no surprise that China will start to look inwards for future semiconductor technologies, with one example being the recently developed range of semiconductor tools by Huawei. However, it is also expected that China will start to initiate retaliatory actions, with the hope of introducing problems for Western companies and governments.

Thus, it comes as no surprise that China has recently announced its new investigation into a US-based semiconductor giant, Micron Technology, over concerns about national security. However, very little information has been made public as to the exact concerns that Micron Technology presents, making it difficult to determine what precisely Chinese authorities are looking for. The investigation is being done to “ensuring the security of key information infrastructure supply chains, preventing cybersecurity risks caused by hidden product problems, and maintaining national security”, but this could imply anything from identifying intentional bugs in Micron hardware to checking the strength of security offered in Micron Technology solutions used in mainland China. 

What do these new developments mean for the West?

While the closure of the Newport Wafer Fab would be devastating for those who currently work there, the impact of the Newport Wafer Fab would be marginal, if at all, to the semiconductor capabilities of the West. Of course, the importance of the fab to the UK should not be understated, as it has the capability to provide automotive-grade parts. This also likely means that the foundry is capable of producing military-grade hardware, something which the West needs to secure. 

However, the investigation of Micron Technologies by Chinese authorities does pose some risks. One concern is that authorities could use the opportunity to conduct industrial espionage, with investigators being granted access to technologies and IP held by Micron Technologies. At the same time, the investigation could also be used to hurt the earning capabilities of Micron Technology, and signs of this have already manifested in the form of a drop in stock value.

Going forward, we can expect to see more investigations into Western companies with facilities in China under the pretence of national security. If China pushes these investigations too far, it will undoubtedly discourage Western companies from opening new foundries and facilities in China, something which China desperately needs. 


By Robin Mitchell

Robin Mitchell is an electronic engineer who has been involved in electronics since the age of 13. After completing a BEng at the University of Warwick, Robin moved into the field of online content creation, developing articles, news pieces, and projects aimed at professionals and makers alike. Currently, Robin runs a small electronics business, MitchElectronics, which produces educational kits and resources.