Image source,Getty Images
British Newport Fab (NWF) mainly produces 200mm (8-inch) pure silicon and synthetic wafers
The news that Nexperia, a wholly-owned subsidiary of the Chinese semiconductor company Wingtech, is planning to acquire the UK’s largest production 200mm wafer wafer factory in Wales’ Newport Fab (NWF) has sparked controversy and protests.
In today’s intensified competition between the United States and China, the United Kingdom, as a traditional ally of the United States, has gone from being “forced” to exclude Huawei’s 5G technology to allowing Chinese companies to acquire semiconductor companies. Critics believe that the current government and the British business community have ignored the country for short-term economic interests Another example of security benefits.
At the same time, some analysis pointed out that after Hong Kong’s forced implementation of the National Security Law and a series of disputes that followed, it is difficult to return to the “golden age” during Xi Jinping’s visit in 2015. However, the British government may also try to Find a path acceptable to all parties between “decoupling” and cooperation.
Disputes over Chinese acquisitions
Tom Tugendhat, Chairman of the Foreign Affairs Committee of the Lower House of the British Parliament and China Research Group, told BBC Chinese that he was shocked that the government had not initiated the National Security and Investment Act to review this Chinese acquisition.
Tugendhat explained that during the G7 summit held in the UK not long ago, the joint declaration by leaders of various countries clearly stated that they hope to strengthen the security of the global supply chain, especially the supply chain of key industrial products such as semiconductors, and allow Chinese acquisitions. The semiconductor manufacturing plant is tantamount to blatantly “violating the promise of the G7 Summit.”
He said: “The semiconductor industry falls under the jurisdiction of the National Security and Investment Act.”
He also pointed out that the Chinese government has a precedent for using economic and technological power to increase its “geopolitical leverage”, so the British government’s move is puzzling.
Major British media have also questioned the government’s decision to allow Chinese investment to purchase semiconductor factories. In addition, some members of the National Security Committee of the US Congress expressed confusion and dissatisfaction with Britain’s decision not to interfere in Chinese acquisitions.
However, the British Secretary of Commerce, Energy and Industry Kwasi Kwarteng said in a public statement that the government will “closely monitor developments,” but “doesn’t think it is time for the government to intervene.”
Image source,Reuters
Sixty percent of 300mm wafers in the world come from South Korea and Taiwan, 200mm wafers are already “old technology“
UK-China competition and cooperation
Some analysts pointed out that since the US-China relationship was guilty and Beijing unilaterally “tore up” the joint declaration between the UK and China, and since the enforcement of the National Security Law in Hong Kong, the British government has been faced with how to balance the pressure from the US, and the domestic political circles have increasingly demanded to decouple from China. , And after the domestic Brexit, the domestic business community still hopes to continue to expand economic and trade exchanges with China.
Critics pointed out that with regard to Huawei’s 5G issue, the British government was hesitant to approve it, and then decide to “partially use it” after review. In the end, it made a decision to completely exclude it under huge internal and external pressure, and made several changes.
While many powerful politicians in the British political circles, especially the Conservative Party, have made high-profile requests for the government to re-examine relations with China, the British business community continues to have many voices hoping to maintain bilateral economic and trade relations.
Beijing’s new ambassador to the United Kingdom Zheng Zeguang recently posted a tweet on his official Twitter about the meeting with representatives of 48 British groups, and called on participants to continue to help promote economic-China-UK trade cooperation. 48 Group Clubs, when they were established in early 1954, represented the 48 British companies that were the first to trade with mainland China at that time, and they were called “old friends” by Beijing. The 48 groups currently have more than 300 members, including former British Prime Minister Blair and Foreign Secretary Straw.
A British business insider who does not want to disclose his identity told the BBC Chinese that he believes that the British government’s acquiescence in the acquisition of fabs by Chinese companies is likely to have three practical considerations:
First of all, although 200mm wafers are still in great demand, they are already “old technology” in the international semiconductor industry. The world‘s leading manufacturers are transitioning from 300mm to 450mm technology. Major wafer manufacturers such as Taiwan and South Korea have accounted for nearly 60% of the global output of 300mm wafers.
Secondly, although the Welsh Newport wafers have excellent craftsmanship, the manufacturers are heavily in debt. It is reported that the loans owed to the Welsh government and the British HSBC Bank totaled nearly 40 million pounds. This acquisition allowed the government to preserve more than 400 relatively high-paying jobs. It is very important for the UK, which is eager to restore the economy, and the above-mentioned Chinese companies have already had branches in European Union countries and Manchester City in the UK.
Third, the British government may not be willing to further stalemate with China for a company that does not involve “real” sensitive technology, and may also try to find a path between complete “decoupling” and both competition and cooperation.
From the perspective of the acquirer, Achim Kempe, the president of Chinese-funded Dutch Anshi Semiconductor Company, said that Xingang fab has an “excellent team” and joining will further enhance Anshi’s international competitiveness. He also said that in the future, Xingang may further “expand production capacity and increase employees.”
Image source,PA Media
New types of automobiles, mobile phones and other industrial products are increasingly adding smart applications, all of which increase the global demand for chips (chips)
International “chip shortage” background
Another media analysis believes that the Chinese-funded acquisition of the British fab is not so much related to obtaining high-tech as it is more related to the shortage of global smart products since the epidemic, and the “chip (chip) shortage” faced by the manufacturing industry. related.
China, which has a developed manufacturing industry, is the world‘s largest chip importer. Like other large manufacturing countries in the world, it is facing the problem of not getting timely chip supply during the production of a large number of products such as automobiles, electrical appliances, and mobile phones.
According to reports, wafer production is an important part of the chip manufacturing process. At present, China’s 450mm is a technological gap, and almost all 300mm wafers are still imported, but the capacity of 200mm wafers is growing rapidly.
According to the “200mm fab outlook report” recently released by the research institute SEMI, from 2020 to 2024, the huge global demand will lead to an increase of about 17% in 200mm wafer production capacity.
The SEMI report also predicts that global semiconductor manufacturers will substantially increase their 200mm wafer production to meet the bulk demand for analog devices, power management chips, MCUs, sensors, and display driver devices for 5G, automotive and Internet of Things applications.
China’s chip independence and international supply chain tightening
According to reports, as the world‘s largest chip importer and consumer country, China’s current chip production rate is only about 30%. In addition, China’s chip manufacturing technology still has a “generational gap” from the world‘s leading level.
Faced with the overall deterioration of relations with the United States and its allies, Beijing policymakers have continuously emphasized the large goal of technological “independence” and invested heavily in chip development and production.
Since the US-China trade war and Hong Kong’s forced implementation of the National Security Law, which led to a series of incidents in Sino-Western relations, the United States, the European Union, the United Kingdom, Japan, South Korea and other countries have begun to take measures against Chinese manufacturers in sensitive technical fields including semiconductor technology. Stricter approvals and even embargoes.
Since 2019, telecommunications companies such as China’s Huawei must obtain prior approval from the US government to purchase goods including semiconductor components and accessories from US companies. Most of the United States‘ Eurasian allies also immediately introduced similar policies.