Concerns: Zhang Xuezheng is on track to buy Newport Wafer Fab
The Chinese tech tycoon behind a controversial takeover of a British company is heading for the UK as part of a charm offensive with Ministers, The Mail on Sunday has learnt.
Zhang Xuezheng, also known as Mr Wing, is set to fly here within weeks amid growing opposition to the acquisition of a semiconductor plant among senior politicians.
Wing’s visit forms part of an attempt by executives at his firm, Wingtech Technology, to settle nerves over a dispute, likely to come to a head next month.
Last year, through its European business Nexperia, Wingtech bought Newport Wafer Fab, which produces vital parts for making semiconductors in South Wales.
The Government last month said it was ‘considering the case and no decisions have been made’. It is not clear if the case is being reviewed under the National Security & Investment Act, which might allow Ministers to block the deal. National Security Adviser Stephen Lovegrove has also been examining the deal.
The deal was this weekend criticised by the chair of the powerful Parliamentary Foreign Affairs Committee, Tom Tugendhat MP, who argued the need to protect Britain’s ‘industrial heartlands’ and innovation. Tugendhat said it was ‘absolutely baffling’ that it had not yet been blocked.
‘I don’t give a damn if China owns a road or a railway. What I do care about is companies that have intellectual property, and that can be moved abroad,’ he said. When asked if the Government should block the deal, Tugendhat said: ‘This is exactly what the National Security & Investment Act is for.’ He called on the Government to ‘get on with it and use the powers it has got’.
Lord Alton, a crossbench peer, described the sale of the factory to a Chinese buyer as ‘madness’ while ex-Conservative leader Sir Iain Duncan Smith said failure to block the sale was ‘yet another step in the pathetic process of appeasing China’. In 2020, MPs blocked the use of China’s Huawei technology in Britain’s 5G networks. There have also been concerns raised about Chinese involvement in Britain’s nuclear energy programme.
Nexperia executive Toni Versluijs, who is responsible for the UK business, which also includes a factory in Manchester, arrives in London this week to meet Whitehall officials to argue the company’s case. He told The Mail on Sunday: ‘We effectively saved the company from bankruptcy. Newport Wafer Fab was heading towards the end, and we saved more than 400 jobs and then created some more.’
The semiconductor ‘wafers’ made in Newport are a vital component in the chip-making process. They are mostly shipped to Asia to make finished semiconductors and account for more than half the value of the final product.
The ‘power’ semiconductors made with wafers are used to make products for companies that include Dyson, in hair dryers and vacuum cleaners, and Bosch, Versluijs said, adding the company had not anticipated the ‘negative reaction’.
‘The national security angle is the one that really surprises us,’ he added. ‘Since when is a hair dryer a national security concern?’
He said Nexperia was ‘a Dutch company with primarily European heritage’ while Wingtech was a company whose shares are ‘traded publicly in Shanghai’ adding: ‘So there is a no such thing as a state influence or state ownership.’
Versluijs said two Chinese state municipalities owned up to 20 per cent of Wingtech, whose shareholders also include Wing, with a stake of about 17 per cent.
Scrutiny: The semiconductor ‘wafers’ made in Newport are a vital component in the chip-making process
‘Those shareholders have signed an agreement that it is also a financial investment and that they will not involve themselves with any decision that the company takes. So that is, I would say, a security layer. Those documents do exist. The municipalities said – look this is a financial investment. We are not going to interfere in whatever way with any of the businesses.’
Versluijs said he hadn’t been ‘formally contacted’ on any investigation linked to national security.
The Department for Culture, Media and Sport is understood to have visited the plant last week as part of its review of Britain’s semiconductor capacity. But Versluijs said: ‘So far we have not been formally approached on, let’s call it, an investigation on the political side.’
Zhang Xuezheng is aiming to meet senior Government officials and Ministers when he arrives in the UK. Versluijs said that he had ‘the intention to meet a number of people around Whitehall to put a couple of things in the right perspective’.
But industry observers said they have been surprised by the lack of Government action over the deal.
Semiconductor veteran Ron Black is understood to have tabled an alternative £300million offer for the firm, supported by a consortium of ten investors.