German government flip-flops on Elmos fab sale – ban now likely

German government flip-flops on Elmos fab sale – ban now likely

Business news |
By Peter Clarke

Automotive chip supplier Elmos Semiconductor has been informed by the German government that the proposed sale of a wafer fab to China-owned Silex Microsystems is likely to be prohibited.

The sale to MEMS manufacturer Silex Microsystems AB (Järfälla, Sweden) for a net purchase price of around €85 million was agreed back in December 2021. For Elmos this was a key part of transition to a fabless strategy. The deal was subject to regulatory approvals and was expected to close in 2H22. However, as the year has wound down the political tension between the US and China has continued to increase.

The wafer fab and its technology are mature being used to make power management ICs, motor control ICs and sensors. German approval was expected to be given until recently (see Report: Germany to okay sale of wafer fab to China despite opposition).

Silex was acquired by Chinese interests in 2015 and is now owned by Sai MicroElectronics Inc. (SMEI), sometimes called CellWise. With the escalating geopolitical tensions between the US and China and with the European Union trying to promote a policy of domestic semiconductor security the deal, like others, has become controversial.

Under pressure

It is understood that the German Ministry of Economics had been inclined to allow the deal but was coming under pressure from security agencies with the German government to consider the strategic importance of European control of chip manufacturing.

Elmos said in a statement issued on Monday November 7 that: “The Federal Ministry of Economics and Climate Protection (BMWK) today has informed the parties involved that the sale of the Elmos wafer fab to Silex Microsystems AB will most likely be prohibited in the upcoming cabinet session on November 9, 2022. This a new development, as until today, the BMWK had indicated to the parties that the transaction most likely will be approved.”

Elmos said the parties would decide on further actions once they had received the ministry’s ruling.

Under the proposed deal Silex would have agreed to supply Elmos with wafers up until at least 2027. This is standard practice for such wafer fab buy-out agreements. What is less usual is that Elmos would continue to own the building but provide the cleanroom to Silex on a long-term lease. Elmos would also provide the infrastructure, utilities, IT-support and licenses to Silex based on separate lease and service agreements. The testing of ICs was to remain with Elmos.


The Elmos-Silex deal has strong similarities to the takeover of Newport Wafer Fab Ltd. (Newport, Wales) by Nexperia NV, a Dutch semiconductor company with a Chinese owner (see Let us stay under China control, Newport workers plead).

In the case of Newport Wafer Fab the deal was allowed to go through but was then started to be investigated almost a year after completion. The UK government is said to be considering reversing the deal or putting limitations on Nexperia. A decision was due by October 3 but has yet to arrive, possibly due to turmoil in UK government leadership.

Related links and articles:

News articles:

Report: Germany to okay sale of wafer fab to China despite opposition

China’s Silex Microsystems remains top MEMS foundry

China buys Swedish MEMS foundry, builds fab

Elmos sells California subsidiary to maintain automotive focus

Opinion: Is the West still blind to China’s ‘buy-the-tech’ strategy?

Let us stay under China control, Newport workers plead

UK set to tell Nexperia to sell wafer fab stake – report

Newport Wafer Fab sale decision delayed, as private equity circles

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