SAN FRANCISCO—A group of U.S. lawmakers has written a letter to Treasury Dept. Secretary Jack Lew urging him to reject the proposed acquisition of programmable logic supplier Lattice Corp. by an investment firmed with ties to China’s central government, saying it represents a threat to U.S. semiconductor leadership.
The letter, authored by Representative Mark Pittenger and signed by 22 members of Congress, warns that the acquisition of Lattice by Canyon Bridge Partners would “distort the market and undermine the innovation system.”
Last month, Canyon Bridge Partners a newly formed, global private equity buyout fund that is headquartered in Palo Alto, Calif., announced it would buy Lattice for $1.3 billion. The letter to Lew describes Canyon Bridge as “directly affiliated with the government of the People’s Republic of China.” Canyon Bridge, the letter states, “appears to be a legal construction intended to obfuscate the involvement of numerous enterprises owned by the Chinese government.
China has been growing increasingly aggressive in attempting to bolster its domestic semiconductor industry through the acquisition of Western firms. The U.S. government has been become increasingly wary of these deals. China’ announced last year it plans to invest $161 billion over the next 10 years to develop a domestic semiconductor industry.
Last week, President Barack Obama issued an order prohibiting the acquisition of the U.S. assets of German semiconductor equipment supplier of Aixtron SE by a shell corporation established by China’s Fujian Grand Chip Investment Fund on the grounds that it presents a threat to U.S. national security. Grand Chip is a Chinese investment firm partly owned by the Chinese government.
In the letter, the Congressmen urge the Committee for Foreign Investment in the U.S. (CIFUS) to reject the Lattice acquisition. CFIUS is an inter-agency government committee that is authorized to review and reject any transaction or investment that could result in the control of any U.S. businesses or assets by a foreign entity.
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