Nexperia Newport is cutting nearly 100 jobs, citing a UK Government ruling and challenging market conditions.
The Newport-based microchip plant, the largest in the UK, currently employs about 600 people.
The decision to cut jobs is partially attributed to a UK Government decision last year that compelled the Amsterdam-based Nexperia to divest at least 86 percent of its stake in the business due to national security concerns.
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Previously, Nexperia had only held a minority stake in the plant, known as Newport Wafer Fab.
However, it gained full ownership of the facility in the summer of 2021 by invoking a clause related to meeting customer orders, acquiring it for £63 million.
Government restrictions
However, since the divestment order, Nexperia has faced restrictions from the UK Government.
It led to the cancellation of investment plans to modernize the plant and introduce new technology and products.
The global semiconductor market has also experienced weaknesses since the fourth quarter of 2022, further complicating Nexperia’s situation.
The company had previously expanded the Newport site’s workforce and provided various benefits.
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Nexperia is complying with the divestment ruling and exploring a possible sale of the facility with advisory firm ATREG.
But it is also pursuing a legal avenue through a judicial review to challenge the UK Government’s decision.
This restructuring initiative will reduce the plant’s workforce to a level similar to when Nexperia initially acquired the business.
The Welsh Government expressed concern over the job cuts and called on the UK Government to prioritize the sale of Newport Wafer Fab to an owner committed to investing in the site.
It highlights the importance of the semiconductor industry in South Wales and the broader UK economy.
