Economy

Trump blocks Chinese-backed acquisition of United States chip maker Lattice

Trump blocks Chinese-backed acquisition of United States chip maker Lattice”

The previous year, China's Huawei Technologies Ltd. called off its planned purchase of 3Leaf Systems after the USA security panel refused to approve the deal.

A statement from the White House press secretary cited the importance of "semiconductor supply chain integrity" to USA security, the Chinese government's role in supporting the transaction and the potential transfer of intellectual property to a foreign buyer.

Chinese companies are on a global buying spree to acquire technology and brands.

"CFIUS and the President assess that the transaction poses a risk to the national security of the United States that can not be resolved through mitigation", Treasury Secretary Steven Mnuchin said in a news release.

Chinese government-backed Grand Chip Investment scrapped plans to buy German semiconductor equipment maker Aixtron (Swiss: AIXA.SW - news) in December after Washington rejected the inclusion of Aixtron's USA unit over fears it could put sensitive technology with potential military applications in Chinese hands.

The national-security risks posed by the deal included "the Chinese government's role in supporting this transaction, the importance of semiconductor supply chain integrity to the United States government, and the use of Lattice products by the United States government", the White House said.

However, it was rejected by the Committee on Foreign Investment in the United States (CFIUS) after several months of persuasion by both parties to clear the acquisition.

Lattice, which has largely exited the defense business, went to uncommon lengths in hopes of saving its $1.3 billion sale to Canyon Bridge, which was first announced in November. But the president followed the recommendation of the Committee on Foreign Investment in the United States, which had raised national security concerns over the sale to Canyon Bridge Capital Partners.

Trump personally intervened in the process after the companies appealed to him directly to overrule the CFIUS ruling, according to The Wall Street Journal. Canyon Bridge is investing on behalf of a Chinese venture-capital fund that is sponsored by China Reform Fund Management, a state-owned asset manager. He also has asked the Commerce Department to look into whether to raise tariffs on imported steel on national security grounds.

"It is likely premature to think that the Trump administration is taking a hawkish approach to Chinese investment across all industry sectors but, of course, only time will tell", Ward said. Then in August, he directed the U.S. Trade Representative to consider investigating China over suspected intellectual-property theft.



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