Newport chip foundry is still possible, Nexperia’s Versluijs tells MPs
Toni Versluijs, UK country manager at Nexperia, has told UK members of parliament that his company’s offer to support a compound semiconductor foundry within Nexperia Newport has been on the table for a year.
Versluijs was giving evidence to the UK government’s Business, Energy and Industrial Strategy (BEIS) Committee on July 5, 2022 on UK semiconductor strategy.
The possibility of such a foundry-within-a-fab was discussed by Versluijs back in August 2021 (see Nexperia’s Toni Versluijs takes questions on the Newport deal). This was after China-owned Nexperia BV acquired the R&D oriented Newport Wafer Fab Ltd. frustrating the plans of some companies for volume manufacturing of compound semiconductors.
Rockley Photonics Ltd. had plans for manufacturing in Newport but Nexperia wanted the fab for its own power semiconductor production.
However, a potential vehicle for a continuation of that compound semiconductor activity, called Newport Wafer Fab 10 Ltd., was registered with Companies House on July 5, 2021, with Drew Nelson, then CEO of wafer supplier IQE plc, as the sole director. Nelson has subsequently stood down as CEO of IQE, giving way to Americo Lemos, who was also present in the parliamentary session. The number 10 in the new company title is believed to refer to the Fab 10 building otherwise known as the Inmos building.
Nexperia’s takeover of Newport Wafer Fab is being investigated under National Security and Investment legislation in a separate UK government action. The latest evidence gathering was in the context of developing UK semiconductor strategy.
Can we build it?
Versluijs was asked if there is an opportunity to create a spin-off company to make compound semiconductors in Newport.
“We have provided such an option to use a currently not-used building to start exactly such an activity. What it would require is funding and a viable business case and viable business plan. The option, to be quite honest, is already outstanding for almost a year,” said Versluijs.
Versluijs was also asked if Nexperia had any plans to close its operation in Newport in the next six to 12 months. This was asked in the context that Nexperia’s owner Wingtech has plans to bring up a 300mm wafer fab in Shanghai.
“We’re not planning to shut any operations,” said Versluijs. “We invested big time in Manchester. We invested big time in Newport. We created the jobs. We’re here to stay,” he said referring to £160 million of investment made at Nexperia’s two UK sites.
Andrew Rickman, CEO of Rockley Photonics Ltd., was another of the executives giving evidence to MPs (see Nexperia executive to give evidence to UK government). Also present were Lemos, CEO of IQE, Simon Thomas, CEO of graphene device specialist Paragraf Ltd., Simon Beresford-Wylie, CEO of Imagination Technologies and Paul Williamson, general manager of the client line of business at ARM.
Rickman illustrated the impact when Nexperia acquired Newport Wafer Fab.
“We had intended to manufacture at Newport Wafer Fab. We built part of the production line in there,” he said. “But Newport Wafer Fab changed hands and the current owner – for business reasons beknownst to themselves – don’t want us in there. They’ve honoured our relationship with regard to the development contract. We’ve had to move the volume manufacturing elsewhere.”
Rickman is believed to be referring to deal with R&D and pilot production foundry SkyWater Technology Inc. (see Rockley signs up to use SkyWater BEOL) announced in August 2021.
“We will ramp up the alternative foundry we have in the US but we will find a replacement for Newport Wafer Fab in due course. If the UK had that capability we would be very happy to use it.”
Rickman said that under the development contract Rockley still has some time left to work within Nexperia Newport. “We have a large team in there. We have our own cleanroom inside the facility. They’ve given us time to transition out of there.”
Paragraf is focused on 2D graphene devices rather than silicon or compound semiconductor devices but CEO Thomas said that an open-access R&D and pilot foundry would be very good for the UK. He added that Paragraf had been forced to conduct more or of its own manufacturing than it might have otherwise due to a lack of local capabilties. For component test Paragraf uses a service company in Malaysia he said while saying he would not advocate the UK trying to on-shore IC test and assembly. He said the resilience of the supply chain depends on having friendly partnerships abroad.
Thomas also stressed how much effort other regions go to try and entice UK companies to open up or even transfer abroad.
The MPs quizzing the senior executives sought an understanding of how semiconductor supply chains work and the scale of investment required to participate in various parts of those supply chains. However, there was no clear sign of an appetite at this stage to embark on public-private investment.
The executives unanimously stressed to the MPs that speed of operation, whether by companies or governments, is vital in the fast-moving semiconductor sector.
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