In the past two years, CFIUS was originally responsible for reviewing the sales and ownership transfer of U.S. companies to foreign entities by a government agency. For reasons of national security, CFIUS declined to sell Aixtron and Lattice Semiconductor to Chinese investors. Recently, CFIUS rejected the sale of Xcerra to a Chinese company. According to reports, the committee participated in the Broadcom acquisition of Qualcomm.
As recently emphasized, Senators John Cornyn (R-TX) and Robert Pittenger (R-NC) launched the Foreign Investment Risk Review Modernization Act (FIRRMA) in November to reform CFIUS for more than a decade. Forms and Functions. In the spirit of effective governance that is more in line with global trends, we welcome efforts to ensure that CFIUS better balances global business and national security.
FIRRMA contains important reform measures to increase the efficiency of CFIUS and help alleviate its rising workload, including putting much-needed resources into the committee. These reform measures include the compilation of regulations to ensure that the installation of each CFIUS organization is confirmed by the Senate. The person directly responsible for the investment review.
However, it is worth noting that FIRRMA failed to adequately address several problems with CFIUS, and in some cases it also created new problems.
First, the bill greatly expands CFIUS's powers, including allowing it to review any non-passive investment of foreign investors in US key technology or critical infrastructure companies, even if investors do not have control over the company. By defining the enterprise as a key technology Or a critical infrastructure company, FIRRMA will review the business, not review the transaction. This means that transactions involving key technology companies that are not key technologies will be subject to unnecessary, time-consuming and costly CFIUS review.
Secondly, FIRRMA will ask the committee to review joint ventures or any other common agreement that shares intellectual property rights with non-US partners. Therefore, CFIUS is responsible for reviewing foreign international business activities for the first time in history. We think this is a serious flaw of the bill. It will only repeat the existing U.S. export control system while adding another layer of regulatory burden.
Third, FIRRMA will create different tracks for CFIUS review based on the source of investors. Countries that receive special attention such as China or Russia will be subject to enhanced scrutiny, while other countries that have similar institutions with CFIUS or have a defense treaty with the United States will Completely free from CFIUS review. This inherent prejudice seems to challenge the core principle of U.S. investment policy - non-discrimination.
Finally, FIRRMA has established regulations for expanding consultations and information sharing with allies. Even if it is unintentional, these regulations may lead to the leakage of unnecessary proprietary information and technology.
In the past year, we have paid more attention to strengthening foreign trade and protecting American industry. FIRRMA is just right for this area. However, rather than creating a wide range of economic obstacles, a better way is to set a higher fence on the selection project. This will help maintain current investment trends that are critical to the semiconductor industry and the overall economy while also protecting national security.
SEMI will continue its efforts to open up new markets while reducing the regulatory burden that may inhibit cross-border trade and commerce. In addition, SEMI will continue to influence policymakers in the development of semiconductors and emerging technologies that are crucial to trade and investment accessibility.