Citing national-security concerns, US semiconductor-testing company Cohu Inc. is mounting a quiet campaign to derail the planned US$580 million sale of American rival Xcerra Corp. to a Chinese state-backed group, the Wall Street Journal reports.
Poway, California-based Cohu recently sent its analysis of the risks associated with the proposed sale of Norwood, Massachussetts-based Xcerra to the Chinese to the Committee on Foreign Investment in the US, a multiagency panel that vets deals for national-security concerns, according to the correspondence reviewed by the Journal. The committee, known as CFIUS and led by the Treasury Department, can approve the acquisition or recommend the president block it.
The deal, announced in April, could give China access to intellectual property that could accelerate its efforts to become a serious player in the industry, Cohu alleges in a six-page white paper it sent to a Treasury official handling CFIUS matters.
“If Xcerra becomes a Chinese state-owned enterprise and obtains top-tier semiconductor companies like Qualcomm, Broadcom and Texas Instruments as customers, it is reasonable to expect transfer of this critical information to Chinese semiconductor companies,” the document says.
Xcerra, in a statement, said: “The allegations Cohu make are false, as Xcerra does not possess critical [intellectual property] from any customer.” Both parties in the deal intend to cooperate fully with CFIUS “to address any potential national security interests,” Xcerra said.
A Treasury spokesman said the agency doesn’t comment on whether any particular transaction is being reviewed by CFIUS.
The deal’s primary financier is a US$20 billion Chinese government-controlled fund called the China Integrated Circuit Industry Investment Fund Co., known locally as “the Big Fund.”
Cohu’s June 2 paper also says a sale of Xcerra could disrupt the semiconductor supply chain and lead to US job losses if the company uses subsidies from its new owner to improperly undercut US rivals.
– Contact us at [email protected]