Germany Chinese Block ERS Electronic

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The German government is reportedly set to block a Chinese takeover of a German chip company – the second potential such blockage in the space of a week.

The company in question is based in Munich ERS Electronicswhich is a manufacturer of thermal management solutions for the semiconductor industry.

Wednesday’s Handelsblatt newspaper, which quoted government sources, noted that Berlin’s block on the Chinese takeover of ERS was due to security concerns, Reuters reported.

Tensions in China

ERS Electronic declined to comment on the matter, Reuters reported.

And at the time of this writing, it’s unclear which Chinese company (or Chinese-owned company) is looking to buy the small German company.

But it comes at a time when tensions between Germany and China are rising.

Reuters noted that German Chancellor Olaf Scholz visited Beijing last week, where it was clear that China and Germany were not “decoupling” friends.

That said, Scholz reportedly complained about increased difficulties for German companies to access the Chinese market.

Earlier this week it was revealed that Germany’s economics ministry is likely to block acquisition of automotive chip supplier Elmos Semiconductor.

Elmos was potentially going to be sold to its rival Silex, a Swedish subsidiary of the Chinese group Sai Microelectronics.

But it has been widely reported that the German government is likely to block the Chinese takeover of the Elmos chip factory over security concerns.

U.S. Export Controls

The German case involving Elmos appears to mirror a UK case, where the UK government has repeatedly delayed its national security decision on whether or not to allow a Chinese entity (the Dutch chip company Nexperia) to acquire Newport Wafer Fab, the UK’s largest chip producer.

Germany is of course also in the position of having to comply with strict controls on chip exports to the United States in China.

These US export restrictions have resulted in the drop in semiconductor imports in China.

Although Nvidia revealed this week that it is capable of circumvent US export restrictions by shipping slower chip to China.

It should be recalled that the United States recently ordered the two Nvidia and AMD will stop selling some of their AI-related technologies to China.

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