Newport Wafer Fab, a leading 200mm silicon chip semiconductor processing facility, has completed a multi-million pound refinancing deal.

The deal involved a restructure of existing Welsh Government loans and a new asset finance facility from HSBC UK.

The finance deal includes the early settlement of deferred consideration, the purchase of specialist, back end of line equipment to broaden the foundry’s manufacturing capabilities and a £3m contribution to a new Combined Heat and Power (CHP) plant designed to reduce utility costs by more than £1.5m per annum.

NWF, which is based in Duffryn, Newport, is a critical component of CS Connected, the world’s first compound semiconductor cluster.

CS Connected, which is supported by investment from the Welsh and UK governments and the Cardiff Capital Region, brings together compound semiconductor material expertise and large-scale semiconductor wafer scale volume manufacturing, combined with world-class academic research to deliver bespoke solutions to its customer using advanced compound semiconductor materials.

CS Connected is one of 24 shortlisted projects, and the only one wholly based in Wales, to receive early-stage funding from UK Research and Innovation’s Strength in Places Fund to develop a full-stage business case submission.

Minister for Economy and Transport Ken Skates said: “Wales’ semiconductor cluster produces cutting edge technology which contributes to many of the items that are so prevalent in modern everyday life.

“The Welsh Government has invested significantly in establishing Wales as a global centre for advanced compound semiconductor technologies and we were pleased to provide support for Newport Wafer Fab so that they can continue work to attract further commercial investment.

“The cluster and its skilled workforce is hugely important to our economy and with world leading companies and technologies operating and thriving in the region, I look forward to its continued success and growth in the years ahead.”

Warren Lewis, Head of Corporate Banking in South Wales at HSBC UK, said: “We are delighted to be supporting a business in growth and one which is helping retain a number of jobs in South Wales. The funding from HSBC UK is helping NWF grow its customer base both domestically and internationally and as a result is on the path to becoming the largest semiconductor foundry in Europe. We look forward to continuing our support over the coming years.”

Cllr Debbie Wilcox, leader of Newport City Council, and a member of the Cardiff Capital Region Regional Cabinet, said: “To achieve our aspiration to create the world’s first compound semiconductor cluster a robust and sustainable supply chain is critical. This investment will enable support this, and in the process deliver the economic and social benefits we aspire to achieve for our local communities here in south east Wales.”

NWF was acquired by private investors in September 2017 from German multinational Infineon Technologies AG, a world leader in semiconductor solutions which produces a wide range of semiconductors, microcontrollers, LED drivers, sensors and automotive and power management integrated circuits. Infineon has been and remains a key customer for Newport Wafer Fab.

NWF was advised on this latest deal by Gambit Corporate Finance and Acuity Law which both led the original acquisition in 2017.