The British government has blocked the sale of British chip design software to a Chinese company, citing national security. The move is the latest move by the government in its increasingly defensive stance against foreign ownership of UK tech companies.
Business Secretary Kwasi Kwarteng announced the move in an official notice posted on the Department for Business, Energy and Industrial Strategy (BEIS) website this week.
The brief notice says the Business Secretary issued the final order under the National Security and Investment Act of 2021 (NSIA), which came into effect earlier this year. This has the effect of preventing the sale of Bristol-based Pulsic Limited to Super Orange HK Holding Limited, which sought to acquire the entire share capital of Pulsic.
Pulsic is an electronic design automation (EDA) company that manufactures planning, placement, and routing tools used in the design and development of circuit layouts for chips. The company says its products are suitable for the “extreme design challenges of advanced nodes.”
In the official notice, BEIS states that the sale was considered a potential national security risk because the tools developed by Pulsic and the expertise they contain qualify as dual-use technologies, meaning they could be used in the creation of “advanced integrated technologies”. circuits that could be used in a civilian or military supply chain.
Many technologies could meet such a dual-use test, so why Pulsic’s chip design software is considered such a security threat is unclear, unless the reason is simply that the UK government – like its American counterpart – sees the development of an advanced semiconductor industry in China as a threat in itself.
However, Bloomberg reports that Super Orange HK Holding Ltd was only founded in Hong Kong last year by a company called Nanjing Puxin Software, which in turn appears to be 100% owned by Shanghai UniVista Industrial Software Group, a company backed by China’s IC industry. Investment fund.
It is a state-owned investment vehicle founded in 2014 to boost the development of China’s semiconductor industry and known in China as “The Big Fund”.
Although the National Security and Investment Act only came into force earlier this year, the UK government has already invoked it in several cases involving foreign investment in UK tech companies.
It investigates the growing ownership of BT shares by French telecommunications tycoon Patrick Drahi, who is now the UK telecommunications company’s largest shareholder. The acquisition of Newport Wafer Fab, the country’s largest chip factory, by Nexperia, a Dutch company which is in turn owned by a Chinese company, is also under consideration.
The UK government also reportedly considered using the NSIA to persuade SoftBank to list chip designer Arm on the London Stock Exchange as part of its public offering, and last month blocked the University of Manchester from licensing of robotic vision technology to a Chinese company. ®
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