U.S. President Donald Trump blocked a Chinese-backed private equity firm from buying a U.S.-based chipmaker, sending a clear signal to Beijing that Washington will oppose takeover deals that involve technologies with potential military applications. Fred Katayama reports.
U.S. President Donald Trump blocked Chinese-backed private equity firm Canyon Bridge Capital Partners from buying U.S. chipmaker Lattice Semiconductor. The planned $1.3 billion deal was one of the largest attempted by a Chinese firm in the U.S. microchip sector. But U.S. regulatory scrutiny grew after Reuters reported in November that Canyon Bridge was partly funded by capital from China's government and had indirect links to its space program. Brookings' David Dollar: (SOUNDBITE) DAVID DOLLAR, SENIOR FELLOW - FOREIGN POLICY, GLOBAL ECONOMY AND DEVELOPMENT, JOHN L. THORNTON CHINA CENTER, REUTERS (ENGLISH) SAYING: "The Committee on Foreign Investment in the U.S. looked at the deal and recommended that it won't be approved, and that's similar with other semiconductor deals in the past. The U.S. does not want Chinese companies, particularly Chinese-state-owned enterprises buying semiconductor companies. To me, the most interesting thing was that the decision got kicked up to the president. Usually, when the committee turns something down, the investors pull out. But the Chinese wanted the deal to go up to Trump. Apparently they thought he might overturn the committee. They think of him as a business man, transactional. But it's not a surprise to me that he stuck with his defense community and rejected the deal." Lattice and Canyon Bridge said the deal did not pose any security risks. But they killed it after Trump's decision. The announcement comes at a sensitive time for U.S.-China relations. They are already strained over trade issues and North Korea.