‘Screeching halt’ for U.S.-based chip start-up with UK’s biggest power plant

August 17, 2021: -A U.S. semiconductor start-up says its relationship with the U.K.’s largest chip plant ended abruptly when Nexperia, a Chinese-owned company, took over in July.

Pennsylvania-based Ideal Semiconductor told CNBC it wanted silicon wafers processed at the Newport Wafer Fab in Wales until the fab was acquired by Dutch firm Nexperia, owned by Shanghai-headquartered Wingtech Technologies.

Mark Granahan, CEO of Ideal Semiconductor, said the processing has “come to a screeching halt,” which adds his company is having to “scramble” to figure out where it can get the work done.

Still, a source close to the company, who preferredto remain anonymous because of the sensitive nature of the discussions, benied that contracts were being scrapped.

Mike Burns, chairman of Ideal Semiconductor, said fabs typically give “a little of runtime” and tell customers the wafers they can process when an acquisition happens.

The semiconductor executives said Newport Wafer Fab informed them by phone that the relationship was done, adding that they haven’t heard from the new owners.

U.K. Business Secretary Kwasi Kwarteng initially approved the sale of Newport Wafer Fab. Still, Prime Minister Boris Johnson has since ordered the national security advisor of the nation, Stephen Lovegrove, to conduct a review, with a verdict expected in the coming weeks.

The U.K. government may ask Nexperia to sell Newport Wafer Fab. A consortium that includes former Imagination Technologies CEO Ron Black is ready to bid if that happens.

Although antitrust regulators are investigating if California semiconductor giant Nvidia should be permitted to buy U.K. chip designer Arm off Japan’s SoftBank, the $40 billion deal is now in jeopardy.

Semiconductors are in short supply, and lawmakers have realized that the companies making these devices might be worth protecting from takeovers.

China is putting semiconductors at the heart of its industrial strategy.