UK chip maker takeover by Chinese firm halted on ‘national security grounds’
The merger between UK-based chip maker Perpetuus Group China’s Taurus International has been halted by the business secretary on “national security grounds”.
Business secretary Kwasi Kwarteng on Sunday issued a public interest intervention notice to intervene in the proposed acquisition.
The Competition and Markets Authority is now set to form a report into the transaction for the Secretary of State, which could last until February next year.
Taurus already owns a large portion of the business, but concerns have emerged that it will harm the UK’s chip supply as China looks to bolster its own.
The global Covid-19 pandemic has stoked a global shortage of semi-conductor chips, which are vital in most electrical devices.
Technology and automotive heavyweights have bee left squabbling over a reduced supply, with some car manufacturers warning customers and shareholders of supply chain disruptions.
It comes as one of China’s top chip manufacturers is looking to bolster its factory network with a new $8.87bn plant near Shanghai, to not only combat the trickling supply but to also make China’s supply less dependent on the West.
The latest plan by the Semiconductor Manufacturing International Corporation follows proposals for another $2.35bn facility in the Shenzhen region, designed to make 40,000 12-inch ‘wafers’ a month.
Analysts and industry experts alike have warned the shortage could continue for months to come.