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Germany vetos Chinese chip plant takeover

by host

German Economy Minister Robert Habeck formally blocked Chinese investors from buying a German chip plant, saying the country had to protect key industries from potential security threats.

“We have prohibited a non-Union investor from entering into business ventures in Germany,” Habeck told reporters in front of the German Chancellor’s office. “The reason for this is that the security of order in Germany must be protected and critical production areas require special protection,” he said.

Chipmaker Elmos said on Monday that the German economy ministry had warned that it would not allow Silex, a Swedish subsidiary of China’s Sai Microelectronics, to buy the company’s Dortmund plant for €85 million.

Elmos is one of Germany’s smaller semiconductor companies, which mainly produces chips for the automotive industry. Under the deal with Silex, Elmos was to use the investment to give up its own production and instead process chips bought from contract manufacturers.

Deutschlandfunk reported that the German government also prevented a Chinese investor from buying Bavaria-based ERS Electronic.

Europe — and Germany in particular — has been grappling with its reliance on autocratic third countries for critical infrastructure, after its dependency on Russian energy was exposed by Vladimir Putin’s war on Ukraine.

The deal vetos come a week after Chancellor Olaf Scholz met Chinese leader Xi Jinping. Ahead of that trip, Germany approved a deal by a Chinese state-owned company to acquire part of a terminal in the strategically important port of Hamburg.

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