Congress

Rep. Pittenger wants U.S. to block sale of company to China-backed firm

By William Douglas

wdouglas@mcclatchydc.com

December 06, 2016 04:27 PM

U.S. Representatives Robert Pittenger, center, Dan Kildee, right, and Jared Huffman, left, talk to media people at the Landstuhl Regional Medical Center in Landstuhl, Germany, Jan. 18, 2016. Michael Probst AP

WASHINGTON Rep. Robert Pittenger is leading congressional opposition to the sale of a U.S. semiconductor firm to Chinese backers, expressing concerns about the deal Tuesday in a letter Tuesday to Treasury Secretary Jacob Lew.

Robert Pittenger, R-N.C., said in the letter that the sale of Lattice Semiconductor Cororation to Canyon Bridge Capital Partners, Inc., a private equity firm with investors in China, seems to be an attempt by the Beijing government to buy the Oregon-based company.

"We are concerned with this transaction as CBCP appears to be directly affiliated with the government of the People’s Republic of China and further appears to be a legal construction intended to obfuscate the involvement of numerous PRC state-owned enterprises during the Committee on Foreign Investment in the United States review process," Pittenger wrote in a letter to Lew signed by 21 other Republican and Democratic House members.

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The Committee on Foreign Investment in the United States reviews deals that could result in control of a U.S. business by a foreign person or entity to determine whether the transaction poses a threat to the national security. If so, the president can block the deal.

Lattice manufactures communication chips used in cars, computers and mobile devices. One of its chips – a field programmable gate array, or FPGA – was found in Apple Inc.’s new iPhone 7, according to The Wall Street Journal, which first reported on Pittenger’s letter.

"FPGA technologies are critical to American military applications, and the purchase of an American FPGA designer and manufacturer by a PRC-affiliated firm could disrupt the military supply chain and possibly lead to a reliance on foreign-sourced technologies for many critical Defense Department programs," Pittenger warned in the letter.

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China’s Foreign Ministry could not be reached for comment Tuesday.

However, a foreign ministry spokesman Monday defended a Chinese investment fund’s effort to purchase the German semiconductor firm Aixtron SE, which has U.S. assets, saying the "Chinese government encourages Chinese companies to engage in overseas investment and cooperation following market rules, international regulations and local laws."

Obama Friday blocked the sale of Aixtron SE to the Fujian Grand Chip Investment Fund LP, which is part-owned by the Chinese government.

"We oppose politicizing or interfering in through political means normal commercial acquisitions, and hope that the U.S. can stop making unfounded accusations of Chinese companies and provide a level playing field and conveniences for Chinese companies’ investment as this serves the common interests of both sides in a long term perspective," foreign ministry spokesman Lu Kang told reporters Monday.