Stocks to watch as UK government faces security threat from Chinese firm

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 Stocks to watch as UK government faces security threat from Chinese firm
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Highlights

  • The UK Government has recently said that the China-owned firm taking over the country's largest microchip plant is a security threat.
  • China-owned Nexperia ought to sell off 86% of its stake to control the national security threats facing the UK.
  • The company responded in shock and said that it would oppose the decision.

The UK Government has recently said that the China-owned firm taking over the country's largest microchip plant is a security threat. In July last year, Nexperia, a Dutch-based technology firm, acquired UK's Newport Wafer Fab. The parent company of Nexperia is Shanghai-listed Wingtech.

Nevertheless, after an evaluation, Nexperia ought to sell off 86% of its stake to control the national security threats facing the UK. The company responded in shock and said that it would oppose the decision.

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Semiconductors are utilised in the production of millions of products globally. There has lately been a shortage of computer chips across the globe, and the shortfalls have been aggravated by the Covid-19 pandemic and have ruthlessly struck a broad array of sectors.

Amid the worldwide chip shortage, the Wafer Fab acquisition has been scrutinised. Approximately 35,000 wafers per year were being produced by the Newport plant at the time of the buyout.

The UK government had been pressurised to get involved even by the Commons Foreign Affairs Committee, which claimed that the acquisition of Nexperia exemplifies the auctioning of a prized asset of the country to a rival, which would possibly hamper the nation's security.

Amid these national security threats, UK investors can keep an eye on the following information technology stock trading on the London Stock Exchange.

Nanoco Group plc (LON: NANO)

The market capitalisation of the specialist in cadmium-free quantum dots production,

Nanoco Group plc stood at £109.63 million at around 11:00 AM (GMT) on Thursday. At the time of writing, NANO shares were trading at the same price they closed on Wednesday, at GBX 34.00. The annual return offered by the firm stood at 36.95% at the time, while its return on YTD (year to date) basis stood at 70.59%. However, the firm's EPS (earning per share) stood in the negative zone, at -0.01.

Micro Focus International plc (LON: MCRO)

The market capitalisation of the FTSE250-listed software and consultancy business, Micro Focus International plc, stood at £1,779.44 million at around 11:00 AM (GMT) on Thursday. After closing at GBX 524.80 on Wednesday, MCRO shares lost 0.08% at the time of writing and were trading at GBX 524.40. The annual return offered by the firm stood at 29.04% at the time, while its return on a YTD basis stood at 26.75%. The turnover (on book) of the firm stood at £307,943.80.

Xaar plc (LON: XAR)

The market capitalisation of the worldwide leader in inkjet technologies, Xaar plc, stood at £151.40 million at around 11:00 AM (GMT) on Thursday morning. After closing at GBX 193.00 on Wednesday, XAR shares gained 1.14% at the time of writing and were trading at GBX 195.20. The annual return offered by the firm stood at 16.44% at the time, while its return on a YTD basis stood at 5.56%. However, the EPS of the firm stood in the negative zone, at -0.15.

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