US Blocks Chinese Firm's Lumileds Acquisition

The US government has finally blocked Chinese major LED chip maker San'an Optoelectronics' plan to acquire Dutch firm Lumileds Holding. This decision comes amid intensifying advanced technology competition between the US and China, and its impact on the future global semiconductor market landscape is drawing attention. San'an Optoelectronics had sought to acquire Lumileds Holding with a Malaysian partner, but the US Committee on Foreign Investment in the United States (CFIUS) requested the transaction be halted, citing that it could pose "unacceptable risks to US national security." In response, San'an Optoelectronics declared its intention to abandon the deal. This marks the second time CFIUS has opposed a Chinese company's acquisition of Lumileds; it previously blocked Philips' attempt to sell an 80.1% stake in Lumileds to a Chinese private equity consortium in January 2016.

This acquisition occurred amidst ongoing tensions between China and the Netherlands over Nexperia. In September 2023, the Dutch government stripped Chinese firm Wingtech, which acquired Nexperia, of its management rights due to concerns such as technology leakage. In response, China restricted exports of products from Nexperia's Guangdong plant.

The US is strengthening its scrutiny of Chinese companies for security and economic reasons, and the US Federal Communications Commission (FCC) is recently reviewing a ban on Chinese telecommunication firms operating data centers within the United States.