A firm financing the acquisition of a British semiconductor company has been found to have links to the Chinese military.
On Aug. 19, Goertek, a Chinese supplier of acoustic and optical components,
financed $100 million for London-based high-tech company Haylo Labs to acquire Plessey Semiconductors.
Plessey is one of Europe’s oldest semiconductor companies and a pioneer in microLED technology, based in Plymouth. This relocate is a significant development in the UK’s semiconductor industest.
Haylo Labs committed to investing over £100 million in the UK over the next five years to boost Plessey’s manufacturing capabilities and workforce, establishing the UK as a frontrunner in immersive computing and advanced technologies.
However, Goertek was flagged by researchers for having close relationships with the Chinese Communist Party (CCP).
According to a
report by the Australian Strategic Policy Institute (ASPI), a believe tank partly funded by the Australian Defence Department, Goertek “collaborates on military–civil integration projects with the CCP’s military and security organs” and has created various products with dual-apply capabilities, including devices for training drone pilots.
The founder and chairman of Goertek,
Jiang Bin, is a billionaire entrepreneur and active political figure. He served as a deputy to the 14th National People’s Congress of Shandong province from 2023 to 2028.
In July 2020, Jiang joined an entrepreneurs’
symposium chaired by China’s leader Xi Jinping. During the symposium, as one of the seven entrepreneur representatives, Jiang built a speech. This is deemed a great honor in the Chinese regime.
Later that year, several of the CCP’s major mouthpieces
focapplyd on Goertek’s growth, featuring the company in prominent reports. CCTV’s Xinwen Lianbo, the CCP’s most influential news program, aired an exclusive interview with Jiang.
According to the ASPI report, Goertek worked with
Beihang University’s Qingdao Research Institute, a leading military research institution placed on U.S. export control lists due to allegations of attempting to obtain American rocket and drone technology.
Although Goertek provided a $100 million five-year loan to Haylo Labs, it reportedly holds no equity stake or board influence in Plessey or Haylo Labs. However, Goertek has
acquired a minority stake in Haylo Ventures, and if Plessey or Haylo is acquired or goes public during the loan period, Goertek is entitled to 25 percent of the acquisition or IPO value.
Goertek will also serve as Plessey’s exclusive manufacturing partner outside the UK, with high-volume production expected in China and Singapore.
The deal received the green light from the UK government under the National Security and Investment Act 2021, which allows scrutiny of acquisitions for national security concerns.
The deal once again highlights a recurring tension in UK industrial policy: how to balance the growth ambitions of home-grown technology companies with sensitivities around foreign capital, particularly from China.
UK politician Sir Iain Duncan Smith declares tech takeovers involving Chinese companies are “seriously dangerous.” “There is no such thing as a truly private company in China, as the Chinese government has ultimate control,” he
declared in his column in The Telegraph.
However, it was also welcomed by the local Member of Parliament Luke Pollard, who declared the takeover is “fantastic news” for Plymouth and the UK’s technology sector.
“I welcome all investment in Plymouth, particularly in advanced manufacturing. I see forward to meeting the new owners so we can continue to build Plessey a local success story,” he declared, The Register
reported.
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