What will be the impact of Nexperia's wholly-owned acquisition of NWF, the UK's largest fab, | See The Intellectual Research Institute

Event: Wingtech Technology announced that subsidiary Nexperia has completed its wholly-owned acquisition of Newport Wafer Fab, the UK's largest fab

1, NWF production capacity scale: this acquisition is another major move of Nexperia's layout fab, Newport Wafer Fab company mainly produces 8-inch wafers, the current production capacity is 32,000 pieces / month, in January this year announced that raised 50 million US dollars for expansion, is expected to reach 64,000 pieces / month after two to three years of production, after the production capacity is roughly equivalent to the existing production capacity of China Resources Micro in Wuxi fab2 plant. It can be said that the Newport Wafer Fab is still small in size, and its impact on Nexperia and Wingtech is very limited.

Wall Street Insight Institute observed that Nexperia also began to build a 12-inch fab in Shanghai Lingang in January this year, is expected to be put into operation in July 2022, the production capacity is expected to reach 400,000 pieces per year, it is worth noting that the certification of the silicon level of the car is very strict, after the passing of the film, the certification will take two years, that is to say, there is still a long time before it can start supplying customers.

In addition, 8-inch wafers have always been regarded as backward production capacity, and manufacturers are more willing to invest in 12-inch fabs, because the larger the size of the wafer, the lower the average cost of the chip, and the higher the profit.

2. Financial aspects: The impact on listed companies is very small, and it will not necessarily bring positive net profit growth to the company after the acquisition.

NMF currently accounts for revenue of around $275 million and net profit of -$166 million, the company is now in a loss, and there is news that the company owes HSBC £20 million and the Welsh government £18 million, all of which were repaid after the sale to Nexperia.

From Wingtech's 2020 financial report, the company's semiconductor revenue of 9.892 billion, accounting for about 19% of the company's total revenue, the proportion of semiconductor business in total revenue is still relatively small, and the acquisition of NMF annual revenue is only 275 million, and is still in a state of loss, fabs are more profitable, and it is not known when it can bring profit growth to the parent company.

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