(Yicai Global) Nov. 18 -- Shares in Wingtech Technology tumbled as much as 4.1 percent today after China’s biggest smartphone assembler said UK authorities have instructed the company to pull out of the UK’s largest chipmaker, just 15 months after the takeover, due to national security concerns.

Wingtech’s share price [SHA:600745] closed down 4 percent at CNY58.45 (USD8.21) today. Earlier in the day it slumped to CNY58.38. The stock has more than halved in value since the beginning of the year.

Wingtech’s Dutch subsidiary Nexperia has been informed by the UK Department for Business, Energy and Industrial Strategy that it must sell at least 86 percent of the 100 percent equity that it holds in Newport Wafer Lab as part of the National Security and Investment Act which came into effect in January, Wingtech said yesterday. The firm has been given a certain amount of time to do so.

Nexperia took full control of Newport Wafer Fab, which mainly produces silicon chips for use in the automotive industry, in August last year. While the price was not announced, it was estimated to be in the region of GBP63 million (USD75 million).

Newport Wafer Lab only accounts for a small proportion of Wingtech’s earnings, at less than 1 percent in the first nine months, and therefore the divestment will not have a significant impact on production and operations, the Jiaxing, eastern Zhejiang province-based company said. The UK chipmaker logged losses of CNY35 million (USD4.9 million) in the first three quarters and revenue of CNY318 million (USD44.5 million).

A number of overseas investments by Chinese companies have been blocked by different governments recently. On Nov. 10, semiconductor firm Sai Microelectronics was banned from purchasing Elmos Semiconductor’s auto chip assets by the German government. And on Nov. 3, Sinomine Resource Group, Shengxin Lithium Energy and Zangge Mining were told to abandon their acquisitions in Canadian lithium miners.

Editors: Dou Shicong, Kim Taylor