Germany Stops Chinese Takeovers of Chip Companies

Germany Stops Chinese Takeovers of Chip Companies

The German government has blocked the sale of two companies to Chinese investors, Economic Affairs Minister Robert Habeck announced. Therefore, chip manufacturer Elmos from Dortmund does not fall into the hands of competitor Silex, a Swedish subsidiary of the Chinese Sai Group.

Which other acquisition will not go through, Habeck could not say because it would be confidential.

The minister said earlier that selling Elmos would be bad for national security. In strategically important sectors, Germany needs to become less dependent on foreign countries, Habeck said. This also includes the chip sector.

Habeck emphasized that foreign investment in Germany is welcome and that China remains a trading partner. However, he also warned that trade could be used for power politics. “An open economy is not a naive economy.”

Business newspaper Handelsblatt previously reported that the German government also wanted to ban the sale of the Bavarian chip company ERS Electronics.

The most advanced chips are not made at Elmos in Dortmund, for which Silex was willing to pay 85 million euros. However, the strategic importance would be great because the semiconductors are still processed in medical equipment.

China and Germany have an intensive trade relationship, but Chancellor Olaf Scholz recently announced that he wants to become less dependent on the Asian country. Chinese President Xi Jinping recently strengthened his power base significantly. Under Xi, the emphasis has shifted to national unity and strengthening the communist system, with censorship also intensifying.

Recently, the German government allowed the Chinese state-owned company Cosco to acquire an almost 25 percent stake in a container terminal in Hamburg. That deal is controversial and several ministers, including Habeck, had reservations about it.

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