Chinese Tech Giant Accused of Military Links in Funding of UK Semiconductor Company Takeover

Strategic Insights -

A major Chinese technology company has been accused of links to China's military in its funding of a takeover of a British semiconductor company, sparking national security concerns. Goertek, which is providing a £75m loan for the takeover of Plessey, has fostered close relationships with the ruling Communist Party and has collaborated with a top military research institution. The deal has raised concerns about the company's potential access to sensitive technology and its alignment with China's military. Plessey, which dates back to 1917, is a specialist in high-performance micro LEDs and supplies companies including Meta.

Key Takeaways:

  • Goertek, the Chinese tech giant funding the takeover of Plessey, co-operates with military research institutions and has fostered close relationships with the ruling Communist Party.
  • The company has collaborated with the Qingdao Research Institute at Beihang University, a top military research institution that has been added to US export controls lists after accusations it had attempted to acquire US rocket and drone technology.
  • The takeover of Plessey, which dates back to 1917, has raised concerns about the potential access of Goertek to sensitive technology and its alignment with China's military.
  • Plessey is a specialist in high-performance micro LEDs, an advanced screen technology expected to grow in the coming years amid the rise of virtual reality and augmented reality devices.
  • Haylo Labs, the investment firm buying Plessey, has promised to invest £100m into the company, expanding its workforce and opening new manufacturing sites in the UK and overseas.
  • Goertek will not have a stake in the business or any board influence, with the companies saying its interest extends only to financing.

Statistics:

  • £75m: The value of the loan provided by Goertek to finance the takeover of Plessey.
  • 5 years: The length of time Plessey has worked with Meta, supplying the company with advanced smart glasses technology.
  • 12 months: The period over which the Government investigated 18 deals involving Chinese acquirers and blocked eight.
  • 16/17: The number of Chinese-linked deals blocked by the Government in the previous year.

Sources:

  • "China's Ambitions in Cyber Warfare" by the Australian Strategic Policy Institute (ASPI) [1]
  • "UK Blocks Chinese deals worth £1.5bn in second Brexit crisis" by The Times [2]
  • "Chinese state-backed investor cleared to take control of UK chipmaker Newport Wafer Fab" by Reuters [3]
  • "MSPs to tackle 'serious' cyber threat" by The Times [4]