Trump bars Chinese-backed firm from buying US-based chipmaker
WASHINGTON: United States President Donald Trump blocked a Chinese-backed private equity firm from buying a US-based chipmaker on Wednesday, 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 (S$1.75 billion) acquisition of Lattice Semiconductor was one of the largest attempted by a Chinese-backed firm in the US microchip sector. It was the first announced deal for the buyout fund, which launched last year with a focus on technology investment.
US regulatory scrutiny grew after it was reported that Canyon Bridge was funded partly by capital from China's central government and had indirect links to its space programme.
Lattice makes chips known as field-programmable gate arrays, which allow companies to put their own software on silicon chips for different uses. It said it no longer sells chips to the US military.
Mr Trump said in an executive order that Lattice and Canyon Bridge "shall take all steps necessary to fully and permanently abandon the proposed transaction" within 30 days.
It chimes with the views of the Committee on Foreign Investment in the US (CFIUS), which scrutinises deals for potential national security threats.
US Treasury Secretary Steven Mnuchin said in a statement following the decision that "CFIUS and the President assess that the transaction poses a risk to the national security of the US that cannot be resolved through mitigation".
Mr Mnuchin added that the national security risk was related to the transfer of intellectual property, the Chinese government's role in supporting the deal, the importance of semiconductor supply chain integrity to the US government and the US government's use of Lattice products.
China expressed concern about the decision.
Chinese Commerce Ministry spokesman Gao Feng said yesterday that he hopes the US can provide fair treatment to what is their "normal commercial behaviour".
Lattice and Canyon Bridge said in a joint statement late on Wednesday they had terminated the proposed deal.- REUTERS