US President Donald Trump has blocked the sale of an American semiconductor company to a Chinese-backed firm, citing national security concerns, the White House has said.
Trump issued an order prohibiting the acquisition of Lattice Semiconductor Corporation (Lattice) by, among others, China Venture Capital Fund Corporation Limited (CVCF), White House Press Secretary Sarah Sanders said yesterday.
CVCF is a Chinese corporation owned by Chinese state- owned entities that manages industrial investments and venture capital.
Trump made the decision under Defense Production Act which authorises him to suspend or prohibit certain acquisitions that result in foreign control of an American business if he concludes, among other things, that there is credible evidence that the foreign interest exercising control might take action that threatens to impair the national security of the US, Sanders said.
Trump reached this decision upon consideration of the appropriate factors and a review of a recommendation from the Committee on Foreign Investment in the US.
"The national-security risk posed by the transaction relates to, among other things, the potential transfer of intellectual property to the foreign acquirer, the Chinese government's role in supporting this transaction, the importance of semiconductor supply chain integrity to the US government, and the use of Lattice products by the United States government," Sanders said.
In his order Trump said there is "credible evidence" that leads him to believe that this acquisition might result in action that threatens toimpair the national security of the US.
The US Treasury Secretary Steven Mnuchin welcomed the presidential decision. He is also chairman of Committee on Foreign Investment in the United States (CFIUS).
"CFIUS and the President assess that the transaction poses a risk to the national security of the US that cannot be resolved through mitigation," Mnuchin said.
"The national security risk posed by the transaction relates to, among other things, the potential transfer of intellectual property to the foreign acquirer, the Chinese government's role in supporting this transaction, the importance of semiconductor supply chain integrity to the US government, and the use of Lattice products by the US government," Mnuchin said.
CVCF is a Chinese corporation owned by Chinese state- owned entities that manages industrial investments and venture capital.
Lattice is a publicly traded company headquartered in Oregon that manufactures semiconductors for the consumer, communications, and industrial markets.
Lattice's primary semiconductor product lines are programmable logic devices, which are general purpose semiconductors that customers can program to provide functionality similar to chips that are designed and produced for specific applications.
Disclaimer: No Business Standard Journalist was involved in creation of this content
