Germany, Brandenburg Gate © S.Borisov Shutterstock 2012

Germany blocks China’s Elmos chip

National security concerns. The German government appears ready to prevent China’s takeover of Dortmund-based Elmos

The purchase of auto chip supplier Elmos Semiconductor by a Chinese entity appears likely to be blocked by the German government.

ReutersCiting ministry sources, it was reported that the German Economy Ministry had recommended to the Cabinet on Tuesday that the government prevent China’s takeover of the Elmos chip factory in Dortmund, saying it would pose a threat to national security.

The German case regarding Elmos seems to mirror the case of the United Kingdom, as the British government has done it Repeated postponement of its decision regarding national security Whether to allow a Chinese-owned entity (Dutch chip company Nexperia) to acquire Newport Wafer Fabthe largest producer of chips in the United Kingdom.

Elmos Semiconductor

In the case of Germany’s Elmos Semiconductor, the German Economy Ministry intervened over its possible sale to rival Silex – a Swedish subsidiary of Chinese group Sai Microelectronics.

Now with the recommendation to stop the deal due to a national security threat, the German government appears certain to prevent a Chinese takeover of Elmos.

The sources confirmed to Reuters that more moderate measures, such as issuing an injunction, are not appropriate to address the identified risks.

On Monday, Elmos said the German government would likely block its sale to Silex.

The sources indicated that the Ministry of Economy and the German government are currently working on a Chinese strategy that focuses on reducing unilateral dependencies and encouraging diversification, as well as protecting infrastructure and preventing technology leakage.

Chinese relations

Tensions between Germany and China have been rising for a while now.

for years Germany was on the fence During Whether the Chinese company Huawei Technologies will be banned Of which 5G networks.

But in April 2021, German lawmakers passed stricter 5G security legislation restricting the role of “untrusted” 5G suppliers and requiring telecom operators to notify the government if they sign contracts for critical 5G components.

He also gave the government powers to stop them.

This put Germany in a similar position Approved by most EU countries.

Reuters noted last week that German Chancellor Olaf Schulz visited Beijing, as it was clear that China and Germany were not friends with the “breakaway”.

However, Schulze also mentioned that he complained about the increasing difficulties German companies are facing in accessing the Chinese market.

Concerns about the extent of Chinese influence in German companies came to the fore last month after Schulz pushed a decision to allow Chinese shipping giant Cosco to buy a stake in a terminal at the country’s largest port, sparking unprecedented protest from within his ruling coalition. , Reuters reported.

The decision sparked an angry reaction from the Foreign Ministry, which warned that the investment disproportionately expands China’s strategic influence and, in the event of a crisis, would open up space for China to use part of Germany’s politically vital infrastructure.

Germany has recently faced heavy criticism for its dependence on Russian gas, and the ownership of German energy storage facilities by Russian entities.

Germany will also have to comply Strict export controls on US chipswho witnessed Decreased semiconductor imports into China.

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