China’s interests are trying to take control of Britain’s largest chip maker, and so far the government has done nothing serious to stop it, says Tom Tugendhat

Speakers: Tom Tugendhat

Ten years ago, Germany built the first Nord Stream gas pipeline to meet its energy needs. They relied on Russian gas to ignite Berlin’s boilers and Munich’s power plants.

It was a deal with the devil, and now the price has become clear.

Vladimir Putin’s hand on the gas tap is gaining influence across Europe as he kills thousands of people in Ukraine.

Today our government has been offered a deal in the world of semiconductors. The scale is micro, but the stakes are the same macro.

Chinese interests are trying to take control of the UK’s largest chipmaker – Newport Wafer Fab. So far the government has done nothing serious to stop it.

Ever since I first outlined Beijing’s plan for semiconductor sovereignty and the implications for global dependence, the implications have become more serious.

High-purity industrial silicon is the building block for everything from lubricants and automotive parts to silicon chips and face creams.

As the world’s largest producer, China controls more than 80 percent of production. The impact is already being felt. A shortage of microchips from Taiwan has delayed production in Britain, costing companies – and workers – millions of pounds from lost products.

This has not gone unnoticed in the US, even among free traders, and they are seeking to protect key industries – such as waffle makers.

We learned the cost of depending on our communities. We have seen rising food prices and rising fuel prices.

We know that everything from the protective equipment we need for hospitals, to the fertilizers in our fields, leaves us under the influence of others when we do not have the strength to produce our own or buy from reliable partners.

This is a security issue. It’s about our future and the future of innovation and manufacturing in the UK. But this is not a question that our special services can answer – it’s not about today’s spies, but about tomorrow’s companies.

It is true that the Newport Wafer Fab is not advanced. There are others, even in the UK, that have more advanced technology. But this is not the only question. The Welsh firm is the largest in the industry here, and if we lose control of it – or if it closes – we will become more dependent on others.

From cars to kettles we know what it means – production is delayed, factories are exported, jobs are lost and Britain is dependent on others. It is not in our best interest. This is not a serious strategy for our future, and it is not how you regain control. We need to look closely at the building blocks of our industrial centers and remember that the core of our business today is in the codes on the chip.

We need to be able to create our own on a scale that encourages innovation. Without it we are just another Germany dependent on another Russia to turn on the lights and heat our homes.


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