After the much-criticized decision on the Port of Hamburg, the federal government completely banned the takeover of the two semiconductor companies by Chinese investors.
“Especially in the semiconductor sector, it is important for us to protect the technological and economic sovereignty of Germany and Europe,” Federal Economics Minister Robert Habeck (Grenz) said after Wednesday’s cabinet meeting in Berlin. Elmos of Dortmund and ERS Electronic of Bavaria may not be sold in parts to Chinese investors.
Regarding China in particular, Habeck said, “we must not be naive and we must see when trade and market interests are used for power politics and possibly used against the interests of the Federal Republic of Germany.” This risk is given in the semiconductor sector.
When asked about the potential economic consequences for jobs as a result of the crippled Chinese firms’ deals, the minister said the big picture had to be considered. “The overall picture means that we have to better protect our critical infrastructure in different areas of production.” China is specifically trying to acquire knowledge about production and development. “The explanations and statements that we know from China are very clear.”
With the foreign trade law, Habeck said, Germany has a “very sharp sword” to fight back. We will continue to sharpen it in the future. There are other options, for example in the field of investment or export guarantees.
Elmos, which produces mainly for the automotive industry, announced at the end of 2021 that it would separate its production facilities at its headquarters in Dortmund. For 85 million euros, Silex should take over the plant and supplies. Silex from Sweden is wholly owned by China’s Sai Microelectronics Group. Elmos announced Monday evening that the government would “most likely” block the takeover.
Elmos is said to have received several million euros in government aid
According to its own description, ERS Electronic produces “high precision” temperature solutions for semiconductor customers. The company is headquartered near Munich with subsidiaries in China and the United States. Habeck did not name the company and referred to “the company’s trade secrets”. However, Federal Research Minister Bettina Stark-Witzinger (FDP) confirmed that the Bavarian company was involved: “It is true that the Federal Government has prohibited the sale of Elmos and ERS Electronic to Chinese investors,” she explains.
According to a report in “Handelsblatt,” Stark-Watzinger lobbied for a ban on the sale to Sai Microelectronics in the Elmos case. The newspaper quoted a letter sent by the minister to Habek as “the existence of a possible tangible danger to the transfer of knowledge.” Elmos himself stated that the Federal Ministry of Economics had initially identified the possibility of approval of the deal.
The newspaper “Wirtschaftswoche” also reported that Elmos had received several million euros in state aid. According to the Ministry of Economic Affairs, 5.9 million euros have flowed into two research projects, and another 8.1 million euros has been promised as part of the European Union’s project for autonomous driving, among others.
The debate over China’s influence in Germany gained momentum when the Chinese state shipping company COSCO entered the port of Hamburg. Despite widespread political concerns, the federal government gave the go-ahead in October. Under pressure from several ministries, the state-owned company was only allowed to own less than 25 percent stake. (France Press agency)