The German government on Wednesday (November 9) blocked a Chinese company from injecting capital into two local semiconductor manufacturers, citing national security and the transfer of sensitive technological know-how to China.
According to Reuters, the German government said it blocked the acquisition of the Dortmund-based chip factory Elmos by Silex, a Swedish subsidiary of Chinese company Sai Microelectronics. German government sources said Berlin also blocked the Chinese company from investing in Bavarian semiconductor company ERS Electronic.
A spokesman for ERS Electronic said the company had no plans to sell, but was exploring a capital injection from a Chinese private equity firm.
According to the announcement of Sai Microelectronics, the wholly-owned subsidiary of Sweden Silex originally planned to acquire the automotive chip manufacturing company of Germany’s Elmos in Dortmund, North Rhine-Westphalia, Germany for 84.5 million euros (S$118 million). Production line related assets (“German FAB5”). On the evening of November 9, 2022, the company and relevant domestic and overseas subsidiaries received a formal decision document from the German Federal Ministry of Economic Affairs and Climate Action, prohibiting Sweden's Silex from acquiring Germany's FAB5. Because of the ban, the acquisition, which was supposed to be nearing its end, will not go ahead and complete. The company will continue to be optimistic about and attach importance to the automotive chip industry and related business layout.
German Economy Minister Habeck said in a statement: "We must pay close attention to corporate acquisitions of critical infrastructure or jeopardizing the flow of technology to non-EU buyers. Especially in the semiconductor industry, this is essential to protect the technological and economic autonomy of Germany and Europe. Important. Of course Germany will remain an open investment position, but we will not be naive either.”
In response to the AFP reporter's question, there are reports that Germany is trying to prevent Chinese companies from acquiring a chip company, saying that this may pose a security threat. Chinese Foreign Ministry spokesman Zhao Lijian said at a regular press conference on the 9th that the Chinese government has been encouraging Chinese companies to follow Business principles and international rules, on the basis of abiding by local laws, to carry out mutually beneficial and win-win investment cooperation overseas. Countries including Germany should provide a fair, open and non-discriminatory market environment for Chinese companies to operate normally. They should not politicize normal economic and trade cooperation, let alone engage in protectionism on the grounds of national security.
