Korea and the U.S. Yet to Approve the Deal
MagnaChip announced on July 6 that the State Administration for Market Regulation of China approved its sale to Chinese private equity firm Wise Road Capital on June 21. The Committee on Foreign Investment in the United States (CFIUS) and the Ministry of Trade, Industry and Energy of South Korea are yet to approve the deal.
At present, the CFIUS is examining the deal in relation to national security. On June 15, it told the U.S.-listed company to temporarily stop every process related to the sale.
According to the Foreign Policy magazine, the order is a sign that the Joe Biden administration will never let China take over a semiconductor company related to the United States. In fact, the CFIUS raised an immediate objection to every similar attempt in 2015 to 2017, when China bought a large number of semiconductor companies.
MagnaChip is not directly related to the United States in terms of employment, intellectual property rights, and so on. The administration’s measure is to block China’s takeover-based growth in the industry from the beginning. MagnaChip is the world’s second-largest OLED display driver IC manufacturer and it is this technology that Wise Road Capital is interested in.