German government blocks Chinese acquisition of two local chipmakers

On November 9, Reuters reported that the German government on Wednesday blocked potential Chinese investment in two German semiconductor makers due to concerns over so-called national security and the outflow of sensitive technical knowledge.

The German government said it had rejected Sweden's Silex's takeover of Dortmund's Elmos chip factory. Silex is a subsidiary of China Sai Microelectronics Group.

According to sources, the German government has also blocked (Chinese companies) investments in ERS Electronic in the southern state of Bavaria. A spokesman for ERS Electronics said there were no current plans to sell the company, but the company had been exploring options for an investment from a Chinese private equity firm.

German Economy Minister Robert Habeck said in a statement, "We must pay close attention to corporate acquisitions when there is a risk of critical infrastructure or technology going to non-EU buyers."

"In semiconductors in particular, it is very important for us to protect the technological and economic sovereignty of Germany and Europe. Of course, Germany is and will continue to be an open investment location, but we are not 'naive' either."

In this regard, Zhao Lijian, a spokesman for the Chinese Ministry of Foreign Affairs, said that he did not know the specific investment situation of Elmos and ERS Electronics, but said that the Chinese side encouraged enterprises to carry out win-win investment cooperation overseas.

Zhao Lijian said that countries, including Germany, should provide a fair, open and non-discriminatory market environment for the normal operation of Chinese companies, not to politicize normal economic and trade cooperation, and not to implement protectionism on the grounds of national security.