But very few markets are completely free. Any Chinese move on a high-profile US semiconductor company would almost always be prevented. Back in 2015 China's bid to kick-start its entry into memory components was immediately blocked (see China bids $23 billion for Micron). But smaller firms and slightly more obscure technology bases continue to be acquired because China values the technology and, by implication, the West does not.
Do events swirling around South Korea's Magnachip and elsewhere suggest that western interests are starting to appreciate technology companies and value them more highly (see Magnachip in play with last minute rival bid)? With big western employers such as automobile companies idling plants repeatedly due to a lack of chip supplies, politicians are starting to describe almost everything related to semiconductors and information technology as "strategic."
South Korea's Magnachip was all set to go – effectively – to Wise Road Capital, a global equity fund manager based in Beijing but at the last gasp things have come up that could block the deal.
The $1.4 billion deal was actually with South Dearborn Ltd., a company incorporated in the Cayman Islands, and Michigan Merger Sub, a Delaware corporation, both of which are investment vehicles established by Wise Road Capital and partners.
The deal was set to progress smoothly but five days ago the South Korean government re-classified Magnachips' OLED display driver technology as a "national core technology," according to a Business Korea report. A cross-border M&A of a South Korean company with a national core technology requires government approval. Reportedly, the South Korean government plans to initiate procedures "soon." The report goes on to say that the Committee on Foreign Investment in the United States (CFIUS) started its own examination of the Magnachip, Wise Road deal last month. Any deal will now require CFIUS and South Korean approval.
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