Due to security concerns, the German government has refused to sell one of its semiconductor facilities to a Chinese-owned tech business.
Elmos Semiconductor, a manufacturer of chips for the automotive industry, was not allowed to transfer ownership of its Dortmund factory to Silex, a Swedish affiliate of China’s Sai Microelectronics, according to a statement from Germany’s economic ministry.
The acquisition would have put Germany’s public order and safety at jeopardy, the ministry stated in a statement, thus the decision had to be made.
In December, Silex revealed that it had a contract in place with Elmos to purchase the factory for €85 million ($85.4 million).
CNN Business contacted Silex for comment, but they did not respond right away.
Elmos said in a statement that both companies regretted the government’s decision.
“The transfer of new micromechanics technologies … from Sweden and significant investments in the Dortmund location would have strengthened semiconductor production in Germany,” Elmos said, adding that it was considering whether to take legal action.
Sia Microelectronics said in a statement Thursday that it “deeply regretted” the decision by the German government. Its shares fell more 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 economy minister Robert Habeck said at a press conference.
He added that the semiconductor industry in Europe, in particular, needed to guard its “technological and economic sovereignty.”
The planned deal had rattled German authorities concerned that Chinese investment in its critical infrastructure could compromise its intellectual property and leave it exposed to political pressure from Beijing.
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