TRUMP BLOCKS SALE OF U.S. CHIPMAKER
China-backed firm’s bid for Lattice Semiconductors fails over national security concerns
PRESIDENT Donald Trump blocked a Chinese-backed firm from buying a United Statesbased chipmaker yesterday, sending a clear signal to Beijing that Washington will oppose takeover deals that involve technologies with potential military applications.
Canyon Bridge Capital Partners’ planned US$1.3 billion (RM4.05 billion) acquisition of Lattice Semiconductor Corp was one of the largest attempted by a Chinese-backed firm in the US microchip sector and was the first announced deal for the buyout fund, which launched last year.
US regulatory scrutiny grew after Reuters reported in November that Canyon Bridge was funded partly by capital from China’s central government and had indirect links to its space programme. US defence officials subsequently raised concerns about the Lattice acquisition by a Chinese government-backed firm.
The company makes chips known as field-programmable gate arrays, which allow firms to put their own software on silicon chips for different uses.
Trump said Lattice and Canyon Bridge “shall take all steps necessary to fully and permanently abandon the proposed transaction” within 30 days.
Trump’s decision chimes with the views of the Committee on Foreign Investment in the United States (CFIUS), which scrutinises deals for potential national security threats.
Treasury secretary Steven Mnuchin said “CFIUS and the president assess that the transaction poses a risk to US national security that cannot be resolved through mitigation”.
Mnuchin said the national security risk was related the transfer of intellectual property, Beijing’s role in supporting the deal, the importance of semiconductor supply chain integrity and the US government’s use of Lattice products.
Meanwhile in Beijing, Ministry of Commerce spokesman Gao Feng said China was 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,” said Gao.