A NEWPORT microchip manufacturer has revealed a proposal to reduce the number of employees and start the process of a “restructuring plan”.

Nexperia Newport, which owns the Wafer Fab site on Cardiff Road, has proposed a reduction in the number of employees by approximately 100.

The Dutch firm saved Wafer Fab from bankruptcy in July 2021.

A spokesperson for the company said they had been forced to cancel investment plans to “make the Newport site fit for the future” due to restrictions imposed by the UK Government.

Nexperia has been a subsidiary of Chinese company Wingtech since 2019.

The statement also pointed towards the continued weakness in the global semiconductor market, which started in the final quarter of 2022.

If the proposal is confirmed, the number of jobs at the Newport site will return to pre-takeover levels when Wafer Fab faced bankruptcy.

A spokesperson for Nexperia Newport said: “This is a business decision that has not been taken lightly but is one that we are taking to protect the future viability of the site.

“When Nexperia first acquired the Newport site, we saw a strongly positive long-term future for its highly skilled people. Nexperia expanded the team there and provided pay rises, bonuses and improved pension plans.

“It will take many months until the Newport site’s future will become clearer. The Judicial Review process is disappointingly slow, for reasons beyond Nexperia’s control. Continuing to explore a potential sale of the site, as directed by the Government, is also likely to take many months.

“Our priority has always been our employees, and we are doing everything to support those affected at this time.”

Welsh Economy Minister Vaughan Gething has said the announcement will come as a “body blow to its extremely talented workforce in Newport”.

“The Welsh Government is ambitious for the compound semi-conductor industry in south Wales. We will continue developing it further with major companies who are investing in the cluster. Our aim is keep doing so alongside a UK Government that acts like a genuine partner.

“However, we have consistently warned that delays and indecision from the UK Government over the potential sale of Newport Wafer Fab have consequences. The recent lacklustre UK Semiconductor Strategy fell short of the ambition we should be setting for the sector and unhelpful comments from a UK minister regarding the cluster in South Wales did nothing to restore the confidence we need.”

Mr Gething previously took fault with the UK Government Technology Minister’s suggestion that south Wales could not recreate the strength of a semiconductor industry such as Taiwan's.

“Once again, we reiterate our calls for the UK Government to treat the sale of Newport Wafer Fab as a critical priority for a sector that is - and will continue to be - a great success story for the Welsh and wider UK economy,” Mr Gething said.

“It is critical that any new owner of the business has the means and intention to invest in the site as soon as possible. Meanwhile, the Welsh Government will provide assistance and support for all employees affected by today’s announcement.”

John Griffiths, MS for Newport East said: "It is obviously very disappointing to hear the news of probable job losses at Nexperia. This is a very important employer and sector for our city - not just now, but also for the years ahead. It is regrettable that time and time again, they have been let down by an uninterested Conservative Government in Westminster.

"I am pleased to see the Welsh Government remain committed to the wider compound semiconductor industry in the region, but that it will also help and support those staff affected by the job losses.

"The secretary of state for Wales and other ministers in Westminster must now come to the table with a proper strategy for the industry and work with Welsh Government, to ensure this industry has a strong future."