U.S. Department of the Treasury

WASHINGTON – As chair of the Committee on Foreign Investment in the United States (CFIUS), the U.S. Department of the Treasury today issued the following statement about the President’s decision regarding the U.S. business of Aixtron SE:

 

The President issued an order prohibiting the acquisition of the U.S. business of Aixtron SE (Aixtron) by Grand Chip Investment GmbH (Grand Chip) and certain of its direct and indirect shareholders (together, the Purchasers). The order directs the Purchasers and Aixtron to take all steps necessary to fully and permanently abandon the proposed acquisition of Aixtron’s U.S. business not later than 30 days after the date of the order.

 

Grand Chip, a German limited liability company ultimately owned by investors in China some of whom have Chinese government ownership, is a special purpose investment vehicle established for this transaction.  Aixtron, a publicly traded company organized and headquartered in Germany, manufactures equipment for the global semiconductor industry, including Metal-Organic Chemical Vapor Deposition (MOCVD) systems used to build compound semiconductor materials.  Aixtron’s U.S. business includes its wholly owned subsidiary, Aixtron, Inc., which is organized and headquartered in California.  The proposed acquisition was to have been funded in part by Sino IC Leasing Co., Ltd., a financing provider belonging to China IC Industry Investment Fund, a Chinese government-supported industrial investment fund established to promote the development of China’s integrated circuit industry.

 

The President took this action pursuant to section 721 of the Defense Production Act of 1950, as amended by the Foreign Investment and National Security Act of 2007 (Section 721).  Section 721 authorizes the President to suspend or prohibit certain acquisitions of U.S. businesses by foreign persons where he finds that there is credible evidence that the foreign interest exercising control might take action that threatens to impair national security, and where provisions of law other than Section 721 and the International Emergency Economic Powers Act do not provide adequate and appropriate authority to protect national security in the matter under review.

 

The President’s decision took into consideration the factors described in subsection 721(f), as appropriate, and the recommendation by CFIUS, after its extensive engagement with the parties to the transaction, that he issue an order prohibiting this transaction.  CFIUS and the President assess that the transaction poses a risk to the national security of the United States that cannot be resolved through mitigation. The national security risk posed by the transaction relates, among other things, to the military applications of the overall technical body of knowledge and experience of Aixtron, a producer and innovator of semiconductor manufacturing equipment and technology, and the contribution of Aixtron’s U.S. business to that body of knowledge and experience.

 

CFIUS is an interagency committee whose purpose is to review transactions that could result in the control of a U.S. business by a foreign person, in order to determine the effect of such transactions on the national security of the United States.  CFIUS’s detailed analysis of the proposed transaction took into account all relevant national security factors, including those elements enumerated in Section 721.  CFIUS also received a thorough analysis of the threat posed by this transaction from the Office of the Director of National Intelligence, as required by Section 721.

 

Consistent with the longstanding, bi-partisan U.S. commitment to open investment, the CFIUS process focuses solely on identifying and addressing national security concerns.  This focused mandate reinforces our commitment to welcoming foreign investment, while at the same time reinforcing our commitment to protecting national security.  The Administration will continue to ensure that the United States remains the most attractive place for businesses to locate, invest, grow, and create jobs. The President’s decision is specific to this transaction and is not a determination with regard to any other foreign direct investment from China or any other country.

 

 

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