U.S. Blocks Chinese Deal for Magnachip

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By George Leopold, EETimes (June 22, 2021)

A U.S. interagency panel has moved to block the acquisition of a South Korean chipmaker by a Chinese investor, signaling what observers say is a significant expansion of U.S. jurisdiction in curtailing Chinese access to strategic semiconductor technologies.

The Committee on Foreign Investment in the United States (CFIUS) issued an interim order on June 15 blocking the Chinese private equity fund Wise Road Capital from acquiring Magnachip Semiconductor Corp. of Seoul, South Korea. The regulatory step puts the deal on hold, but observers said it’s unlikely U.S. and Korean regulators would allow it to proceed in its present form, citing national security concerns.

Wise Road’s $1.4 billion acquisition Magnachip was announced in March. It was reportedly expected to close later this year.

According to a June 17 filing with the U.S. Securities and Exchange Commission, CFIUS also prohibited Magnachip from delisting from the New York Stock Exchange. A day later, Korean regulators weighed in, reportedly designating Magnachip’s OLED drivers as a “national core technology.”

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