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9 Nov, 2022 14:32

Germany blocks Chinese chip takeovers – media

Berlin is reportedly concerned about national security and possible economic dependency
Germany blocks Chinese chip takeovers – media

Germany is on a mission to protect its domestic chip industry from buyouts by Chinese firms, according to media reports.

The country’s Economy Ministry formally blocked a Swedish subsidiary of China’s Sai Microelectronics, from buying Dortmund-based chipmaker Elmos for €85 million, Politico reported on Wednesday.

“We have prohibited a non-Union investor from entering into business ventures in Germany,” the outlet quoted economy minister Robert Habeck as saying. “The reason for this is that the security of order in Germany must be protected and critical production areas require special protection,” Habeck explained.

Another acquisition, of Bavarian company ERS Electronic by a Chinese investor, was also banned by the Federal Cabinet at Habeck’s request, according to the Handelsblatt newspaper, which cited its sources in the government.

Reuters reported earlier this week that the economy ministry and the government are working on a China strategy that would reduce one-sided dependencies and encourage diversification, as well as protect infrastructure and prevent technology leakage.

Facing global semiconductor supply chain problems, the EU decided to develop its own domestic production. Berlin offered €14 billion ($14 billion) in financial support in May to attract manufacturers, and US IT giant Intel decided earlier this year to build a new plant in Germany.

China is one of the world’s largest semiconductor-producing countries and, according to some estimates, it is expected to manufacture nearly 25% of chips in the world by 2030.

The reported ban on the acquisitions follows a controversial decision last month by Chancellor Olaf Scholz to sell a minority stake in a terminal in the port of Hamburg to Chinese shipping group COSCO. The deal was widely criticized for increasing Germany’s dependence on China at a time when Berlin is trying to wean itself off Russian energy imports.

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