German government has blocked the sale of a Chinese tech company, to Silex, a subsidiary of China's Sai Microelectronics, due to security concerns, as reported by CNN.
(Photo : by GREG BAKER/AFP via Getty Image)
The German and EU flags fly at half mast at the German embassy in Beijing on September 6, 2021, after the announcement of the death of Germany's ambassador to China Jan Hecker.
Elmos Semiconductor makes chips for the automotive industry, and its factory is located in Dortmund. The decision of the government to not allow the sale is due to security issues specifically that they fear the sale will endanger public order and safety of Germany.
It was in December last year when Silex announced that it went into an agreement with Elmos to buy the factory for $85.4 million.
What Elmos Has to Say
Elmos isn't happy with the decision and believes that the transfer of new micromechanics technologies would help strengthen semiconductor production in Germany. The company also said that they are considering taking legal action.
As for the German government side, they are firm in protecting the technological and economic sovereignty. They also think that Chinese investment in their important infrastructure could compromise their intellectual property and have them go under political pressure from Beijing.
Also Read: US-China Tech War: ASML, Lam Research Pulls American Engineers From China Amid New Chip Restrictions
Not A First
This is not the first time that the German government blocked a Chinese deal. Last month, Costco had plans to purchase a 35 percent stake in the operator of a Hamburg port terminal, but the deal was blocked entirely.
The tension is also triggered by the recession in the crisis that is brought by the crisis over Russian energy. However, the country's manufacturers and exporters are still willing to maintain their close relationship with China.
The top importers in China are car companies and tech companies, which are companies that are very sensitive to security issues.
It is also known that the German government is also very concerned about the fact that China was able to greatly increase its stake in the German telecommunications industry. The fear of the country being vulnerable to cyber attacks from China is very high.
Elmos gets most of its revenues from the automotive industry. So the decision of the German government is mainly due to security. This is the same reason why the deal with Costco was blocked, which would make the acquisition of the German port exit harder for the Chinese.
China's Trouble to Infiltrate International Waters Continue
China is confident in its global economic expansion, but the country is having a hard time in securing deals overseas. This is all because of the United States and its allies' concerns over national security.
The failed bid of China to acquire the German semiconductor technology firm Elmos is just one of the many attempts that China is having to make in order to secure deals overseas.
Economists foresee that Beijing will continue to struggle in making big deals, particularly with countries that have close relationships with Washington.
Related Article: US Looks to Expand Tech Bans on China to AI and Quantum Computing
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Written by April Fowell
