AN AGREEMENT has been reached by the owners of Newport semiconductor manufacturer to continue production at the site and maintaining around 500 city jobs in the process.

Infineon, who own the International Rectifiers site in Duffryn, are set to finalise a deal with Neptune 6, believed to complete at the end of the month, with the latter firm taking over control of production.

The firms have also entered into a two-year supply agreement ensuring a mutually smooth transition phase and once finalised, the buyer intends to operate the site under the name Newport Wafer Fab Ltd.

Jochen Hanebeck, a member of the management board operations at Infineon Technologies AG, said: “I am convinced that with Neptune 6 we have found the right partner who will secure production and jobs in Newport.

“Knowing we would have to part with the Newport site, it was my personal concern to make sure it will be in good hands.

“I am also delighted that the solution we have found now enables us to support our customers even better and more flexibly.

“The transfer of the fab is a major step in consolidating our frontend manufacturing footprint after the acquisition of International Rectifier.

“I would like to express my sincere thanks to Neptune 6, the Welsh Government and above all to the highly committed employees at the Newport facility who have always excelled by their enormous commitment and expert knowledge.”

Steve Berry, the legal director of Neptune 6, added: “The Newport site, which comes with a skilled workforce of highly reliable and very experienced people, is extremely well placed to contribute to the rapidly emerging International Compound Semiconductor Cluster of South Wales.

“The fab is very well equipped to act as a globally competitive chip foundry, and Newport Wafer Fab Ltd. will be highly complementary to the existing semiconductor expertise in the region.”

Mr Berry expressed his gratitude to the involved parties, including Infineon, HSBC Bank and the Welsh Government for facilitating the transaction.

“The success of the transaction means that Newport Wafer Fab can provide the employees, the region and the UK with a very bright future in high volume advanced semiconductor chip manufacturing,” he said.

Ken Skates AM, the cabinet secretary for economy and infrastructure, said: “I am delighted that the Welsh Government has been able to support a deal to save the Newport site and the jobs of the people employed there.

“The closure of the site in Newport would have been a major setback for the local and national economy and would greatly detract from the substantial investments made to establish Wales as a global centre for Advanced Compound Semiconductor technologies.”

The cabinet secretary added that the site would form a key part of the Compound Semiconductor Cluster over the coming years.

“The cluster will make a significant contribution to the future of the Welsh economy and support many global companies based here, such as Airbus, GD, Sony and GE.

“The synergies this can deliver will contribute to increased skills levels in the region and will attract further technology businesses to Wales.

“Highly-skilled technology roles, such as these retained in Newport, are of significant value to our economy and vital to ensure Wales capitalises on the growth of the digital economy.”

Jayne Bryant, AM for Newport West said: “This is fantastic news for the workers, their families and the region.

“Since being elected last year I have worked closely with the Cabinet Secretary Ken Skates AM to ensure that everything possible was done to keep these high quality jobs in Newport.

“Having met with senior management at Infineon to discuss their plans I know it has been a worrying time and the workforce have done everything in their power to support the company.

“They are highly skilled and incredibly loyal. I’m so pleased that we have been able to retain these important jobs in Newport.

“We faced the threat of losing the unique and valuable capabilities not only in Wales, but in the whole of the UK. “With the future of Newport WaferFab Ltd now secured, I hope the new owners Neptune 6 Ltd will go from strength to strength.”