Trump blocks sale of Lattice Semiconductor to Chinese GP

According to a statement, Trump issued an order prohibiting the acquisition of Lattice to a Chinese investment group that includes China Venture Capital Fund Corporation (CVCF), which is controlled by Chinese state-owned entities that manage industrial investments and venture capital. He reached the decision upon a review of the recommendation from the Committee on Foreign Investment in the US (CFIUS).

NASDAQ-listed Lattice makes high-performance programmable chips used in consumer electronics, industrial equipment, communications infrastructure, and automobiles. In November, the company said it had agreed to be sold to Canyon Bridge in a deal worth $1.3 billion.

The proposed transaction went through three 75-day CFIUS review cycles, during which national security concerns were flagged. Lattice and Canyon Bridge reportedly prosed mitigation terms to address the concerns, which were not accepted. CFIUS then referred the transaction to Trump for a decision.

The Lattice deal is only the fourth transaction blocked by a US president under the CFIUS statute. The White House questioned the buyer’s close ties to the Chinese government, noting there is “potential transfer of intellectual property to the foreign acquirer.” It added that the US government relies on using Lattice products and preserving the integrity of the semiconductor supply chain is vital.  

Canyon Bridge, founded by Benjamin Chow and Raymond Bingham, is headquartered in Silicon Valley and has operations in Beijing. Chow has previously held senior roles in China Reform Fund Management - a PE firm sponsored by China Reform Holdings and other central state-owned enterprises - Beijing Leading Capital, SIG China and Warburg Pincus. The firm, which received its initial funding from Chinese LPs, is looking to make control investments in technology companies and support expansion in growth markets.

Semiconductor assets in the US have attracted considerable interest from Chinese investors, but proposed deals are now closely scrutinized by regulators. For example, Tsinghua Unigroup scrapped its plan to invest in US-based disk drive manufacturer Western Digital after regulators decided to investigate the deal, while Go Scale Capital also walked away from the acquisition of Philips’ LED components and automotive lighting unit Lumileds.

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• Topics
• Greater China
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• China
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