President Trump Blocks Sale of Lattice Semiconductor to Private Equity Fund with Ties to Chinese State-Owned Enterprises, Underscoring Uniquely Difficult Environment for Obtaining CFIUS Approval of Semiconductor Transactions Involving Chinese Investors
On September 13, 2017, President Trump issued an Executive Order blocking the proposed $1.3 billion sale of Lattice Semiconductor to Canyon Bridge Capital Partners, a private equity firm managed by United States nationals and backed by funds from several Chinese state-owned entities. The Order states that Canyon Bridge and its Chinese affiliates, “through exercising control of [Lattice], might take action that threatens to impair the national security of the United States.” The decision marked the first opportunity for President Trump to invoke his formal authority under the Defense Production Act of 1950 to block a foreign investment in the U.S. on national security grounds. By accepting a recommendation from the Committee on Foreign Investment in the United States (“CFIUS”) to block the acquisition, President Trump rejected arguments presented by Lattice Semiconductor and Canyon Bridge that the transaction would create American jobs and boost the U.S. economy.