China Threat

White House panel urges U.S. defence of clout in high-end chip market
Reuters

WASHINGTON -- A blue-ribbon presidential panel on science recommended on Friday that the United States take steps to defend its dominance of the high-end semiconductor market against a stiff Chinese challenge.
The report follows plans by China to use a massive, $150 billion government investment in its semiconductor industry to expand the share of Chinese-made integrated circuits in the domestic market from its current 9 percent. 

Semiconductor chips are used in everything from computers to automobiles.
The President's Council of Advisors on Science and Technology said the United States needed new tools to ensure China did not replace the United States as the leader in making high-end semiconductors that are key to national defence.
The report urged policy-makers to "respond forcefully" if Chinese economic policies, such as subsidies aimed at building Chinese expertise in semiconductors, limit the access of U.S. companies or thwart U.S. exports.
"The main goal here should be to deter dangerous Chinese actions," the report said.
Tools that could be used include the Committee on Foreign Investment in the United States (CFIUS), an inter-agency panel led by the Treasury Department that assesses Chinese investment to ensure it does not harm U.S. national security, the panel said.
Concern about China is one of the few areas where the administration of Barack Obama and President Donald Trump's incoming team appear to agree.
In November, U.S. Secretary of Commerce Penny Pritzker said the United Stated would not accept China's "$150 billion industrial policy designed to appropriate this industry."
Under Obama, CFIUS stopped a series of Chinese acquisitions of high-end chip makers. 

Last month, he upheld a recommendation by CFIUS to block Aixtron's 670 million euro ($717 million) sale to Fujian Grand Chip Investment Fund over national security concerns.
Last January, CFIUS prevented the sale by Philips of its U.S. lighting business to GO Scale Capital, made up of GSR Ventures, Oak Investment Partners, Asia Pacific Resource Development and Nanchang Industrial Group.

Chinese Peril: The U.S. Is Leaning on Germany to Block a Chinese Takeover.

It already killed a Chinese bid for Philips LumiLED business
By Reuters

The US is getting very touchy about Chinese access to LED technology.

U.S. intelligence services warned Berlin that a now on-hold Chinese takeover of German semiconductor equipment maker Aixtron could give Beijing access to technology that could be used for military purposes, business daily Handelsblatt said.
The German Economy Ministry said Monday it had withdrawn its approval for Fujian Grand Chip Investment Fund (FGC) to buy the Aachen-based firm for 670 million euros ($732 million), citing security-related information.
The ministry declined to comment further in light of the Handelsblatt report on Wednesday and said it could give no details on the “origin or the nature” of the information that led to clearance being withdrawn.
A spokeswoman added the review would likely take between two and three months once the ministry had collected all relevant documentation.
Aixtron shares dropped 7.1% in Frankfurt Wednesday to a five-month low of 4.84 euros, well below the 6 euros per share that FGC had offered shareholders for their stock.
The newspaper, citing German intelligence sources, said U.S. authorities had shown representatives of German ministries evidence last Friday, at a meeting at the U.S. embassy in Berlin, although they refused to hand it over.
Concern is growing in Berlin about losing key technology to China after a string of Chinese acquisitions of German companies, including robotics group Kuka AG. 

However, many are niche companies that, while dominant in their particular specialties, are nowhere near big enough to deter predators from China, which has spent nearly $200 billion on foreign acquisitions this year alone.
Aixtron sells its equipment, which is used to deposit chemical layers on silicon wafers, mainly to LED (light-emitting diode) chipmakers. 

It is not designed for military purposes but analysts say it could be adapted, with some difficulty.
The U.S. Committee on Foreign Investment in the United States (CFIUS), which reviews takeovers from a national security perspective, in January blocked a plan by Dutch company Philips to sell its Lumileds LED business to Chinese buyers.