A bipartisan group of lawmakers is urging the U.S. government to block the planned sale of an American company that produces technology for military applications to a venture capital firm with ties to the Chinese government.
Rep. Robert Pittenger (R., N.C.) wrote to Treasury Secretary Jack Lew on Tuesday asking the Committee on Foreign Investment in the United States, or CFIUS, to block the sale of Lattice Semiconductor to Canyon Bridge Capital Partners, a new American private equity firm supported by Chinese funding.
Lattice Semiconductor is an American producer of technology for applications in the U.S. military. The company announced in November that it would be sold to Canyon Bridge Capital Partners, the private equity firm, for $1.3 billion.
"We are concerned with this transaction as CBCP (Canyon Bridge Capital Partners) appears to be directly affiliated with the government of the People's Republic of China (PRC) and further appears to be a legal construction intended to obfuscate the involvement of numerous PRC state-owned enterprises during the Committee on Foreign Investment in the United States (CFIUS) review process," Pittenger wrote in the letter, which was cosigned by 21 members of Congress.
"As you know, Lattice is the third largest American producer of Field Programmable Gate Array (FPGA) technologies," Pittenger, a member of the House Committee on Financial Services, wrote. "FPGA technologies are critical to American military applications, and the purchase of an American FPGA designer and manufacturer by a PRC-affiliated firm could disrupt the military supply chain and possibly lead to a reliance on foreign-sourced technologies for many critical Defense Department programs."
"The PRC's interest in the U.S. semiconductor market is clear and well-coordinated, and their firms have faced well-deserved scrutiny when attempting to directly acquire American producers," Pittenger wrote. "In this instance, the PRC appears to have created an American venture capital firm to act as a conduit for Chinese government control over one of our largest semiconductor suppliers."
CFIUS is authorized to examine transactions resulting in foreign control of U.S. businesses to determine any national security implications of the sales.
Pittenger and other lawmakers have previously worried about Chinese and Russian companies purchasing U.S. businesses, successfully pushing for a review of CFIUS by the Government Accountability Office earlier this year.