London/Berlin
CNN Business
—
The German government has blocked the sale of one of its semiconductor factories to a Chinese-owned tech firm as a result of of security issues.
Germany’s financial ministry mentioned in a press release that it had prohibited Elmos Semiconductor, which makes chips for the automotive business, from promoting its factory in Dortmund to Silex, a Swedish subsidiary of China’s Sai Microelectronics.
The choice had been taken “because the acquisition would have endangered the public order and safety of Germany,” the ministry mentioned in a press release.
Silex introduced in December that it had signed an settlement with Elmos to purchase the factory for €85 million ($85.4 million).
Silex didn’t instantly reply to CNN Business’ request for remark. Elmos mentioned in a press release that each firms regretted the federal government’s choice.
“The transfer of new micromechanics technologies … from Sweden and significant investments in the Dortmund location would have strengthened semiconductor production in Germany,” Elmos mentioned, including that it was contemplating whether or not to take authorized motion.
Sia Microelectronics mentioned in a press release Thursday that it “deeply regretted” the choice by the German authorities. Its shares fell greater than 9% in Shenzhen.
“We have to take a close look at company acquisitions when important infrastructure is involved or when there is a risk of technology flowing to acquirers from non-EU countries,” German economic system minister Robert Habeck mentioned at a press convention.
He added that the semiconductor business in Europe, particularly, wanted to guard its “technological and economic sovereignty.”
The deliberate deal had rattled German authorities involved that Chinese investment in its essential infrastructure may compromise its mental property and depart it uncovered to political stress from Beijing.
Similar issues motivated the German authorities to intervene in plans by Chinese delivery big Cosco to purchase a 35% stake within the operator of a Hamburg port terminal final month.
Officials restricted the deliberate funding in Hamburger Hafen und Logistik to 24.9%. Several authorities ministers, together with Habeck, has pushed for the deal to be blocked fully.
The tensions have arisen at a tough time for the German economic system, which is sliding right into a recession triggered by the disaster over Russian power. Germany’s producers and exporters are keen to preserve their shut relationship with China.
Only final week, Chancellor Olaf Scholz met with Chinese leader Xi Jinping within the first go to by a G7 chief to Beijing in roughly three years, a visit designed to shore up export markets as Germany’s ties with Russia — as soon as its greatest provider of pure gasoline — proceed to unravel.
A delegation of prime business CEOs, together with the bosses of Volkswagen
(VLKAF), Siemens
(SIEGY) and chemical compounds big BASF
(BASFY), traveled with Scholz to Beijing to meet with Chinese enterprise executives.
But Habeck struck a word of warning on Wednesday. Addressing the blocked chip deal, he confused that “Germany is and will remain an open investment location” however that it was not “naive”.
The go to got here only a month after the United States launched stringent controls on chip exports to China, a transfer designed to defend its nationwide security and bolster its home semiconductor business.
In early October, the Biden administration banned Chinese corporations from shopping for superior chips and chip-making tools with no license.
The guidelines threaten to strike an enormous blow to China’s ambitions to develop into a tech superpower as they not solely bar exports of chips made anyplace on the earth utilizing US expertise, but additionally the export of the instruments used to make them.
— Laura He contributed reporting.
