President Trump blocked Lattice Semiconductor Corporation from being acquired by several entities including Canyon Bridge Fund I, LP and China Venture Capital Fund Corporation, a private equity firm backed by a Chinese state-owned asset manager, citing national security concerns.
Trump issued the order Wednesday blocking the purchase of the U.S. chip maker for under the Defense Production Act of 1950, which permits him to restrain foreign entities from acquiring U.S. businesses if he deems there is evidence the foreign party might threaten the national security of the United States.
"The national-security risk posed by the transaction relates to, among other things, the potential transfer of intellectual property to the foreign acquirer, the Chinese government's role in supporting the transaction, the importance of semiconductor supply chain integrity to the United States Government, and the use of Lattice products by the United States Government," a statement from the White House read.
A statement from the Treasury Department said that Trump made the decision based on the recommendation of the Committee on Foreign Investment in the United States, an interagency committee that investigates these type of transactions between U.S. businesses and foreign entities, which concluded the acquisition would be harmful to national security.
"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," Treasury Secretary Steven Mnuchin said in a statement. "The national security risk posed by the transaction relates to, among other things, the potential transfer of intellectual property to the foreign acquirer, the Chinese government's role in supporting this transaction, the importance of semiconductor supply chain integrity to the U.S. government, and the use of Lattice products by the U.S. government."
Canyon Bridge Fund said that it was "dissapointed" by the decision and defended the deal as one that would have increased the opportunity to keep jobs in America.
"We are obviously disappointed in today's decision by the President of the United States to forgo what we believe to be an excellent deal for Lattice's shareholders and its employees by expanding the opportunity to keep jobs in America," Canyon Bridge Fund said in a statement to the Washington Examiner. "Canyon Bridge is committed to providing equity and growth capital to ensure the long-term success of the companies we invest in. We remain focused on other investment opportunities where we can work with exceptional companies to create jobs and grow revenue."
Lattice produces semiconductors for the consumer, communications, and industrial markets. The order instructs CVCF and Lattice to entirely discard the acquisition of Lattice in no more than 30 days.