Germany blocks sale of chip factory to China over security fears

CNN Business

The German government has blocked the sale of one of its semiconductor factories to a Chinese technology company over security concerns.

The German Ministry of Economy announced in a statement that it has banned the semiconductor diamond. which produces chips from the sale of its factory in the automotive industry Dortmund to Silex, a Swedish subsidiary of China’s Sai Microelectronics.

The ministry said in a statement that the decision was “taken because the purchase endangers public order and security in Germany.”

Silex announced in December that it had signed an agreement with Elmos to buy the plant for 85 million euros ($85.4 million).

Silex did not immediately respond to CNN Business’ request for comment. Elmos said in a statement that both companies regret the government’s decision.

“The transfer of new micromechanical technologies from Sweden and significant investments at the Dortmund site will strengthen semiconductor production in Germany,” said Elmos.

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“We have to take a hard look at acquisitions when important infrastructure is involved or when there is a risk of technology being transferred to buyers from non-EU countries,” German Economy Minister Robert Haubeck said at a press conference.

He added that the semiconductor industry in Europe in particular needs to protect its “technical and economic dominance”.

The planned deal had worried German officials that Chinese investment in its critical infrastructure could jeopardize its intellectual property and expose it to political pressure from Beijing.

Similar concerns prompted the German government to intervene in Chinese shipping giant Cosco’s plans to buy a 35 percent stake in the Hamburg port terminal operator last month.

The authorities limited the planned investment in Hamburger Hafen and Logistik to 24.9%. Several government ministers, including Habak, have insisted on blocking the deal completely.

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The tensions come at a difficult time for the German economy, which is sliding into recession due to the Russian energy crisis. German manufacturers and exporters are eager to maintain close ties with China.

Just last week, Chinese Chancellor Olaf Schulz met with Chinese leader Xi Jinping in the first trip by a G7 leader to Beijing in three years, a trip designed to boost export markets as Germany’s ties with Russia — once its biggest supplier This country’s natural gas generator was designed. Continue to open

A delegation of top industry executives, including the heads of Volkswagen ( VLKAF ), Siemens ( SIEGY ) and chemicals giant BASF ( BASFY ), traveled with Schulz to Beijing to meet with Chinese business executives.

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But Hoback cautioned on Wednesday. Addressing the blocked chip deal, he stressed that “Germany is and will remain an open investment destination” but was not “naive”.

The visit comes just a month after the United States imposed strict controls on chip exports to China, a move designed to protect the country’s national security and boost its domestic semiconductor industry.

In early October, the Biden administration banned Chinese companies from buying advanced chips and chip-making equipment without a license.

The rules deal a major blow to China’s ambitions to become a tech superpower, as they ban not only the export of chips made anywhere in the world using US technology, but also the tools used to make them. he does.

Laura O contributed to the report.


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