Germany Blocks Elmos' Chip Factory Deal with Sai Microelectronics

Technology Author: Contributor, Yinhua Zhu Nov 09, 2022 03:48 PM (GMT+8)

On Wednesday, the German government blocked the sale of a chip factory of Elmos to a Chinese company. It indicates the future strategies of German in the Chinese market. This decision was made after the recent compromise over a Chinese shipping firm’s investment in a German container terminal and Chancellor Olaf Scholz's visit to Beijing.


The German government prohibited the EUR 85 million sales of the Elmos chip factory in Dortmund to Silex Microsystems AB of Sweden, which Sai Microelectronics of China owns. It questioned if it is safe to put German IT production capacity in Chinese hands. Elmos and Silex regretted the government’s decision, and Elmos believed that the transfer of new technology would have strengthened semiconductor production in Germany.

 Scholz’s government plans to draw up a 'comprehensive China strategy' instead of a 'trade-first approach to China' made by predecessor Angela Merkels. Also, western governments have tightened controls on access to processor chips and other technology with the increased concerns about China’s technology ambitions and assertive foreign policy.

 However, it is an unsolved question about the extent to which Chinese companies should be allowed to invest in Europe’s biggest economy. Officials argued over whether to let China’s COSCO take a 35% stake in a container terminal at the Hamburg port. Finally, they decided that the investors could block the decision if COSCO took a stake above 25%.

 A Chinese foreign ministry spokesman, Zhao Lijian, called on the German government to 'provide a fair, open and non-discriminatory market environment for normal operation of all companies' and avoid 'using national security as a pretext for protectionism.'