MINISTERS should urgently intervene in the sale of a Newport-based microchip manufacturer to a Chinese-backed company, the influential Commons Foreign Affairs Committee (FAC) said.

The MPs said “our sovereignty should not be for sale” as they called for tougher action to prevent strategically important companies being sold overseas.

The cross-party report called for the takeover of Newport Wafer Fab by Chinese-owned Nexperia to be formally called in for review, with the UK Government imposing “appropriate mitigation measures”.

Committee chairman Tom Tugendhat said: “Our fiercest competitors, notably China, have a track record of using foreign investments to gain access to important technologies and information.

“We’ve witnessed too many of our country’s brilliant tech firms disappear abroad with potentially significant economic and foreign policy implications.”

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Prime Minister Boris Johnson has asked National Security Adviser Sir Stephen Lovegrove to examine the Newport Wafer Fab sale.

But Mr Tugendhat said “it should not take prime ministerial intervention to ensure we don’t lose another of our most innovative companies to China”.

The MPs said the takeover of the South Wales firm, which was acquired by Nexperia earlier this month for a reported £63 million, “represents the sale of one of the UK’s prized assets to a strategic competitor, at a time when global chip shortages means that the products manufactured by NWF are of vital national importance”.

They warned that failing to conduct a detailed assessment of the deal under the new National Security and Investment (NSI) Act would indicate that Mr Johnson’s administration “continues to hold an unrealistically optimistic understanding of the Chinese government’s intentions” and is prioritising “short-term commercial interests” over the UK’s long-term security.

“We recommend that the Government calls in the acquisition of Newport Wafer Fab by Nexperia for review and imposes appropriate mitigating measures, as a matter of urgency,” the committee said.

The FAC report acknowledged that foreign investment is essential for the UK economy, but takeovers could result in “strategically vital companies” and intellectual property being lost overseas.

“This transfer of assets threatens to make us reliant on others for assets and services that are critical to our capacity for independent action and global influence, as well as undermining the UK economy and our national security,” the FAC said.

“Our sovereignty should not be for sale.”

The MPs said that the NSI Act, passed in April, was a vital step towards protecting British businesses but “failure to implement it effectively would have catastrophic effects for our global influence and security”.