By WILLIAM MAULDIN
Twenty-two House lawmakers wrote to Treasury Secretary Jacob Lew, who leads a panel that reviews foreign acquisitions, with unusually grave concerns about the purchase of Lattice Semiconductor Corp.
U.S. lawmakers are warning the Obama administration not to green-light a China-backed semiconductor deal, increasing the pressure on Beijing just days after Barack Obama barred a Chinese investor from purchasing another technology firm with key semiconductor assets.
Twenty-two House lawmakers wrote to Treasury Secretary Jacob Lew, who leads a panel that reviews foreign acquisitions, with unusually grave concerns about the purchase of Lattice Semiconductor Corp.
Lattice, based in Portland, Ore., said last month it had agreed to a $1.3 billion buyout offer from Canyon Bridge Capital Partners Inc., a new private-equity firm backed by investors in China.
Canyon Bridge, whose activities hadn’t come to light until recently, is based in Palo Alto, Calif., and has funding from unspecified limited partners in China, according to documents Lattice filed with the Securities and Exchange Commission.
“We are concerned with this transaction as [Canyon Bridge] appears to be directly affiliated with the government of the People’s Republic of China and further appears to be a legal construction intended to obfuscate the involvement of numerous PRC state-owned enterprises during the Committee on Foreign Investment in the United States review process,” the lawmakers wrote in a letter dated Tuesday that was seen by The Wall Street Journal.
The committee that reviews foreign deals, known as CFIUS, can recommend that the president block investments emanating from abroad when officials identify national-security issues that can’t easily be mitigated.
On Friday, following a recommendation from CFIUS, Obama took the very rare step of blocking a deal outright, preventing a Chinese investment fund from purchasingAixtron SE, a German technology company with U.S. assets.
Obama’s move to strike down that deal—and the lawmakers’ letter Tuesday—show the escalating concern about Chinese deals targeting sensitive American assets, even before the administration of Donald Trump, who made criticism of Chinese economic moves a cornerstone of his campaign.
Lattice makes communications chips for use in cars, computers, mobile devices and other items. Analysts found one of its programmable chips—a variety known as FPGA, for field programmable gate array—in Apple Inc.’s new iPhone 7.
But in the letter lawmakers led by Rep. Robert Pittenger (R., N.C.) described FPGA as “critical to American military applications” and said “anything other than a rejection of this acquisition” would appear to undermine the administration’s recent public warnings about technology deals.
Commerce Secretary Penny Pritzker told a technology gathering in Washington last month that “we are seeing new attempts by China to acquire companies and technology based on their government’s interests—not commercial objectives.”
China’s Ministry of Foreign Affairs declined to comment directly on the action by U.S. lawmakers, but said Tuesday that “normal investment activities” between the two countries shouldn’t be politicized or “used as a tool to hype the so-called ‘China threat.’”
Beyond the hypercompetitive technology sector, some U.S. lawmakers and politicians are increasingly sour about rolling out the red carpet for Chinese deals in industries where Beijing has blocked international investment in its own market.
The Obama administration prioritized talks with Beijing on a bilateral investment treaty that would have opened up Chinese industries to U.S. investment, but the negotiations stalled over the number of industries China wanted to keep closed.
U.S. lawmakers are warning the Obama administration not to green-light a China-backed semiconductor deal, increasing the pressure on Beijing just days after Barack Obama barred a Chinese investor from purchasing another technology firm with key semiconductor assets.
Twenty-two House lawmakers wrote to Treasury Secretary Jacob Lew, who leads a panel that reviews foreign acquisitions, with unusually grave concerns about the purchase of Lattice Semiconductor Corp.
Lattice, based in Portland, Ore., said last month it had agreed to a $1.3 billion buyout offer from Canyon Bridge Capital Partners Inc., a new private-equity firm backed by investors in China.
Canyon Bridge, whose activities hadn’t come to light until recently, is based in Palo Alto, Calif., and has funding from unspecified limited partners in China, according to documents Lattice filed with the Securities and Exchange Commission.
“We are concerned with this transaction as [Canyon Bridge] appears to be directly affiliated with the government of the People’s Republic of China and further appears to be a legal construction intended to obfuscate the involvement of numerous PRC state-owned enterprises during the Committee on Foreign Investment in the United States review process,” the lawmakers wrote in a letter dated Tuesday that was seen by The Wall Street Journal.
The committee that reviews foreign deals, known as CFIUS, can recommend that the president block investments emanating from abroad when officials identify national-security issues that can’t easily be mitigated.
On Friday, following a recommendation from CFIUS, Obama took the very rare step of blocking a deal outright, preventing a Chinese investment fund from purchasingAixtron SE, a German technology company with U.S. assets.
Obama’s move to strike down that deal—and the lawmakers’ letter Tuesday—show the escalating concern about Chinese deals targeting sensitive American assets, even before the administration of Donald Trump, who made criticism of Chinese economic moves a cornerstone of his campaign.
Lattice makes communications chips for use in cars, computers, mobile devices and other items. Analysts found one of its programmable chips—a variety known as FPGA, for field programmable gate array—in Apple Inc.’s new iPhone 7.
But in the letter lawmakers led by Rep. Robert Pittenger (R., N.C.) described FPGA as “critical to American military applications” and said “anything other than a rejection of this acquisition” would appear to undermine the administration’s recent public warnings about technology deals.
Commerce Secretary Penny Pritzker told a technology gathering in Washington last month that “we are seeing new attempts by China to acquire companies and technology based on their government’s interests—not commercial objectives.”
China’s Ministry of Foreign Affairs declined to comment directly on the action by U.S. lawmakers, but said Tuesday that “normal investment activities” between the two countries shouldn’t be politicized or “used as a tool to hype the so-called ‘China threat.’”
Beyond the hypercompetitive technology sector, some U.S. lawmakers and politicians are increasingly sour about rolling out the red carpet for Chinese deals in industries where Beijing has blocked international investment in its own market.
The Obama administration prioritized talks with Beijing on a bilateral investment treaty that would have opened up Chinese industries to U.S. investment, but the negotiations stalled over the number of industries China wanted to keep closed.
