The German government is exploring a possible sale of a local chip factory to a Chinese-owned company, sources said on Thursday, despite reported concerns from intelligence agencies.
Government officials, speaking on condition of anonymity, told AFP that they are assessing the potential impact of a takeover of Dortmund’s Elmos by Sweden’s Silex, a unit of Chinese company Sai MicroElectronics.
“There is an ongoing investment review process,” an official said. “Controls have begun, are ongoing and are not yet complete.”
The Chinese firm’s overture comes next week ahead of the visit to China of German Chancellor Olaf Scholz, who has become the first European Union leader to make the trip since November 2019.
And it coincides with growing fears within his coalition government and among intelligence officials about the risks of critical infrastructure and intellectual property falling into foreign hands.
The business daily Handelsblatt previously reported that Berlin intends to give the deal the green light, possibly as early as next week.
In contrast to other controversial takeovers in the recent past, the Chancellor’s Office and the Ministry of Economics are in agreement about Elmos and would rather approve the takeover because the company’s technology is not up to date, the report says.
But the Office for the Protection of the Constitution warned against the sale, saying Chinese control over key manufacturing capacity was enough for Beijing to put pressure on Germany, Handelsblatt reported.
The office could not immediately be reached for comment.
– Security Concerns –
Elmos, which mainly manufactures components for the automotive industry, announced at the end of last year that it would sell the production facility at its headquarters.
Silex is seeking to purchase the site and its supplies for 85 million euros (dollars), which would allow Elmos to cease its own manufacturing activities and sell its chips to manufacturing companies.
Germany’s coalition government on Wednesday allowed a Chinese company to buy a reduced stake in a Hamburg port terminal after Scholz fought back calls to ban the controversial sale outright over safety concerns.
After a tenuous compromise in the Scholz cabinet, the Chinese shipping giant Cosco has been given the go-ahead to buy a stake of “less than 25 percent” in HHLA’s Tollerort container terminal.
Germany, together with EU partners, has been scrutinizing Chinese investments in sensitive technologies and other areas in recent years and reserves a right of veto.
The issue has gained urgency amid the collapse in ties with Russia over the Ukraine war, when Europe’s elite economy was once heavily dependent on Moscow’s energy supply.
