The British government has delayed the decision on whether the UK’s largest producer of semiconductors can be bought by a Chinese-owned manufacturer by another month and a half.

The business secretary, Kwasi Kwarteng, had been expected to make a decision by Tuesday on the purchase of Newport Wafer Fab by Nexperia, a Dutch firm wholly owned by China’s Wingtech.

Kwarteng has sought an extra 45 working days to scrutinise the controversial £63m deal, in a move first reported by the Financial Times.

In late May, he launched an inquiry into the potential takeover of the manufacturer under the new National Security and Investment Act, which was introduced at the start of the year.

This decision gave the business secretary an initial 30 working days to reach a judgment, with the option of extending the time for a further 45 working days. After this period, he can then block the deal, demand remedies, or allow it to go ahead.

Nexperia, which is looking to acquire Newport Wafer Fab, is based in the Netherlands but is a subsidiary of China’s partially state-backed Wingtech.

Any deal for the UK firm is particularly sensitive as it has multiple contracts with the UK government, including defence-related projects.

Most of the world’s semiconductors are produced in factories in Taiwan and South Korea, although the industry has risen in geopolitical prominence as China has set about asserting itself on the world stage under its president, Xi Jinping.

Global shortages of computer chips, sparked by the pandemic, have caused large production delays for carmakers in the UK and beyond, as well as for technology companies and other manufacturers.

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Semiconductor producers in countries including the US and Japan, and the EU, have been investing heavily and expanding their facilities.

On Tuesday, the UK boss of Nexperia told parliament’s business, energy and industrial strategy (BEIS) committee – which is holding an inquiry into the UK semiconductor industry – that the government’s delay in reaching a decision over the deal was causing impatience among customers, investors and employees.

Toni Versluijs also told MPs the company had no plans to move operations abroad if its acquisition of Newport Wafer Fab is allowed to proceed.