‘Micron points out Tsinghua obstacles to possible takeover’

The chip company Tsinghua Unigroup, which is part-owned by the Chinese state, may not be allowed to buy American memory manufacturer Micron because the deal could endanger American state security. That would have let Micron know.

Tsinghua Unigroup made an offer of 20.9 billion euros for the American chip manufacturer last week, but Micron thinks that a takeover is not feasible. Reuters claims this based on anonymous sources familiar with the case. The acquisition should be approved by the Committee on Foreign Investment in the United States. This committee would likely have a problem with the takeover due to its national security impact, as the arms industry is increasingly incorporating chips into its products.

However, the deal is not impossible. The deal may go ahead subject to conditions. One of those conditions could be that a specific department of Micron may not be purchased, or must be resold immediately. This would neutralize any potential impact on US state security.

Tsinghua Unigroup is part of a holding company that is wholly owned by the Chinese state. In 2013, the company already acquired two major Chinese chip companies. The acquisition of Micron would be a big step forward for China’s chip industry, which is lagging behind other countries in terms of development. Tsinghua already has a significant stake in HP’s networking business in China. Conversely, however, Intel again has a 20 percent stake in Tsinghua.