Published: Thu, September 14, 2017
Business | By Max Garcia

Trump Blocks China-Backed Fund from Buying US Chip Maker Lattice

Trump Blocks China-Backed Fund from Buying US Chip Maker Lattice

President Donald Trump has blocked an attempt by Canyon Bridge Capital Partners LLC, a private-equity firm backed by a Chinese state-owned asset manager, to acquire of Portland-based Lattice Semiconductor - a prominent maker of chips known as field-programmable gate arrays.

The decision prohibited Canyon Bridge, its partner Yitai Capital and Yitai's parent, the China Venture Capital Fund Corp (CVCF), from purchasing the U.S. firm, which serves the consumer, communications and industrial markets.

Trump, who has been critical of Chinese business practices while requesting Beijing's cooperation on exerting greater economic pressure on North Korea, did not approve of the deal after the Committee on Foreign Investment in the USA had rejected the deal, possibly out of security concerns, Bloomberg reported Wednesday.

In his order Trump said there is "credible evidence" that leads him to believe that this acquisition might result in action that threatens to impair the national security of the US.

The business deal put Trump in the middle of a hot-button issue: Chinese investment in the United States.

In the case of Lattice, CFIUS and the president decided "the transaction poses a risk to the national security of the United States that can not be resolved through mitigation", the Treasury said in a statement.

The national security risk included "the potential transfer of intellectual property" to the Chinese-backed company and the "Chinese government's role in supporting this transaction", according to Mnuchin's statement.

In an executive order President Trump said that Lattice and Canyon Bridge "shall take all steps necessary to fully and permanently abandon the proposed transaction", within 30 days. Its primary semiconductor product lines are programmable logic devices, which are general goal semiconductors that customers can program to provide functionality similar to chips that are designed and produced for specific applications.

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