Trump blocks sale of USA chip company to China-backed firm


President Donald Trump on Wednesday issued an order blocking a group that includes a Chinese venture capital firm from purchasing Lattice Semiconductor Corp.

Canyon Bridge says it's headquartered in California, but its website also lists a Beijing address and states, "Initial funding for Canyon Bridge comes from limited partners in China".

President Trump has stopped the takeover of an American chip maker by a private equity firm with ties to China. The integrity of the semiconductor industry, it said, was vital. USA officials worry that China's investment push could threaten the competitiveness of American industry and give Beijing access to cutting-edge technology with commercial and military applications. Acquisitions of US companies like Lattice by overseas buyers are reviewed by the Committee on Foreign Investment in the USA, a panel staffed by senior officials from the Treasury, State, Homeland Security and Defense departments.

Treasury said the deal posed a national security risk due to Beijing's support for the transaction, the potential transfer of intellectual property to the foreign investors, and the importance of the semiconductor supply to the U.S. government, including Lattice's products. If it doesn't like a deal, it can recommend the president block it.

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The company did not have a comment on the decision at press time. While a president in theory could overrule the panel's recommendation, the three previous proposals kicked up to the president since 1990 have been blocked as the panel advised.

President Trump ordered that Lattice and Canyon Bridge "shall take all steps necessary to fully and permanently abandon the proposed transaction" within 30 days.

In a statement, Canyon Bridge said it was "disappointed in Trump's decision to "forgo what we believe to be an excellent deal for Lattice's shareholders and its employees by expanding the opportunity to keep jobs in America". "CVCF is a Chinese corporation owned by Chinese state-owned entities that manages industrial investments and venture capital".