£51m investment in semiconductor plant

A multi-million pound investment by the US electronics giant Vishay into the former Newport Wafer Fab semiconductor plant is being welcomed by the Welsh government.

Vishay paid £142m for the UK’s largest semiconductor facility last year, saving more than 400 jobs.

The Americans bought Newport Wafer Fab after the UK government forced the sale by its previous owners over concerns with links to China.

The new owners are investing another £51m into the site on the Duffryn Industrial Estate, which has now been branded Newport Vishay.

Welsh government Economy Secretary Rebecca Evans said the investment showed that Wales was "increasingly a world-leading nation" in semiconductor production.

The Welsh Conservatives said the news would "burnish Wales’ proud manufacturing credentials".

Semiconductors, or chips, made at the site are used in millions of electronic products, from smartphones to household equipment and cars.

There had been controversy over the future of the Newport semiconductor plant when the previous Conservative UK government expressed deep national security concerns when the silicon chip plant was bought in July 2021 by Nexperia.

The Dutch-based technology company is a subsidiary of Shanghai-listed Wingtech.

After a review, the UK government forced the firm to sell its 86% stake in the plant because of its links to China.

Vishay Intertechnology, one of the world's largest manufacturers of semiconductors, bought the plant outright in November 2023 for a reported $177m (£142m), securing more than 400 jobs.

But that deal still required national security clearance by the UK government and that "consent order" was issued in March.

The consent order rubber stamped the new US ownership, but it came with some conditions.

The UK government must be informed if Vishay plans to enter into any future agreement to sell, transfer or lease to any third party that would give them access to the factory.

The £51m investment includes £5m from the Welsh government and will bring new products and jobs to the Newport company.

Evans said: "Compound semiconductors are all around us – in our homes and in our phones, our trains and our turbines.

"They are a vital, if miniature, piece of what makes the modern world tick, with extremely strong global growth projections.

"And we in Wales are increasingly a world-leading nation in their production and manufacture.

"Today that is more evident than ever, with our international reputation attracting significant inward investment, the provision and occupation of state-of-the-art facilities, clear links with R&D and well-paid opportunities for employment and apprenticeships.

"We are now, after a decade of seeding the cluster, reaping the rewards of our commitment which we will continue to drive forward."

The chip factory on Cardiff Road began as Inmos in 1980 but has changed hands numerous times in the decades since.

It is the UK's largest manufacturer of semiconductors.

Welsh Conservative shadow economy minister Samuel Kurtz said the investment in the plant was "welcome news that will burnish Wales’ proud manufacturing credentials".

"The vital and secure investment from our allies in the US would not have been possible without the [previous] UK Conservative government’s strategic decision-making."

BBC Wales political editor, Gareth Lewis

The purchase of the Newport plant by Vishay ended two years of uncertainty, and the new investment points to an even more certain future.

There had been big question marks over jobs prior to the takeover, and workers made multiple trips to Westminster to lobby ministers and MPs.

The site is hugely important to the Welsh government’s plans to develop a semiconductor cluster in south east Wales.

This is also an example of how Wales - and highly-skilled - Welsh workers have been caught up in geopolitics.

As we saw under the previous UK government, the semiconductor industry is hugely important to ministers in Westminster too – but only if the firms behind it are deemed secure and suitable.