US-China ‘chip war’ spreads to Europe

 Two key European chip deals have fallen victim to a Chinese and US tech rivalry.

Two deals were shelved amid widespread Western concern about China’s potential takeover of Europe’s critical infrastructure.


Last week, the new owner of Britain’s largest chipmaker was ordered to reverse gear on takeovers, after a chip factory in Germany was blocked from selling. Both transactions cited national security concerns as Chinese-owned companies’ acquisitions as the reason.

The future of chip manufacturers is uncertain

In the UK, Nexperia, a Dutch subsidiary of Shanghai-listed semiconductor manufacturer Wingtech, has been told by the government to sell at least 86% of its stake in Newport Wafer Fab, more than a year after it took control of the factory. . Since then, employees have protested the decision, saying it puts nearly 600 jobs at risk.

In Germany, the economy ministry also stopped the sale of automotive chip maker Elmos Semiconductor’s factory in Dortmund to Silex, a Swedish subsidiary of China’s Sai Microelectronics.

In Germany, the economy ministry has banned Elmos Semiconductor, an automotive chipmaker, from selling its Dortmund factory to China’s Silex, a Swedish subsidiary of Sai Microelectronics.


Chip production was emerging as a new front in US-China tensions. The two troubled deals now show how pressure is mounting in Europe, especially as Western officials face calls to keep key sectors out of Chinese control.

These decisions mark a shift towards tougher stances on China’s investment in critical industries in Europe.

White House pressure on European chip manufacturers

Pressure from the United States certainly played a role in these decisions. The growing sense of technology dominance likely also triggered these moves. Governments around the world increasingly see the semiconductor industry as a strategic resource and seek to protect them from foreign takeovers.

 Legal experts said the last two decisions in Europe were noteworthy because every deal was initially thought to be cleared.

 Recently in the US, the Biden administration had enacted extensive export controls that prohibited Chinese companies from purchasing advanced chips and chip-making equipment without a license. The rules also prohibited American citizens and US green card holders from providing support for the development or manufacture of chips at certain manufacturing facilities in China.

The legal process can take years.

International trade lawyers argue that chip manufacturers could face an indefinite war that could last for years if they objected in the current situation.

On the other hand, attention is shifting to the Netherlands. According to experts, the Dutch government is currently facing pressure from the US to limit exports to China, particularly semiconductor equipment manufacturer ASML, which dominates the lithography machine market.

It is wondered how the US-China technology war, which has recently reached the summit with mutual steps in the chip industry, will evolve into a period after what has happened.


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