Fri, Sep 15, 2017 - Page 1 News List

Trump blocks PRC purchase of US chipmaker


A sign is pictured outside a Canyon Bridge office in Beijing, China, yesterday.

Photo: AFP

US President Donald Trump on Wednesday blocked a Chinese government-financed firm’s acquisition of an Oregon semiconductor maker on national security grounds.

A US federal panel that reviews foreign investment in the US for possible security threats ruled against the proposed US$1.3 billion purchase of Lattice Semiconductor last week.

The deal has been under scrutiny since it became clear the buyer, Canyon Bridge Capital Partners, is funded by the Chinese government.

Chinese companies are on a global buying spree to acquire technology and brands. Most acquisitions in the US and Europe go through without incident, but some purchases of high-tech companies have prompted criticism they might represent security threats or the loss of important national assets.

“Credible evidence leads me to believe” the buyers of Lattice “might take action that threatens to impair the national security of the United States,” Trump said in his order.

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

It was just the fourth time in a quarter century that a US president has ordered a foreign takeover of an American firm stopped on national security concerns.

Trump has expressed concern about the status of US manufacturing and its ability to meet national security needs.

In July, he issued an order for a review to be led by the US Department of Defense. He also has asked the US Department of Commerce to look into whether to raise tariffs on imported steel on national security grounds.

Following Trump’s announcement, Lattice said it was canceling the proposed sale.

Ministry of Commerce spokesman Gao Feng (高峰) yesterday told a media briefing in Beijing, that China is concerned over the matter and that the US should create a fair and transparent business environment.

“Conducting security checks on a sensitive investment is a nation’s legitimate right, but it shouldn’t be used as a protectionist tool,” Gao said, adding that the acquisition is a corporate decision that the US should evaluate objectively.

Lattice manufactures a relatively low-tech class of programmable computer chips that can be adapted for a variety of uses. It had 1,000 employees worldwide at the end of the last year, but that number dwindled after Lattice sold a division in India and laid off workers.

In December last year, the German government blocked the Chinese purchase of a chipmaker, Aixtron SE, after then-US president Barack Obama prohibited the buyer from taking over its California subsidiary on national security grounds.

Additional reporting by Bloomberg

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