FRANKFURT Feb 9 A challenge on U.S. national
security grounds to Infineon Technologies' agreed
deal to buy Wolfspeed from U.S. firm Cree Inc could
crimp the German chipmaker's profit and electric car ambitions,
Late on Wednesday Infineon said there is "considerable risk"
that its acquisition of compound semiconductor specialist
Wolfspeed from Cree for $850 million (794 million euros) will be
derailed after the companies said they had been told by a U.S.
government security panel that the deal posed security risks.
The Committee on Foreign Investment in the United States
(CFIUS), a government panel that scrutinises deals for possible
security concerns, has not identified any steps the companies
could take to allow the deal to be completed, they said.
Wolfspeed was expected to bolster Infineon's expertise in
new chip-making materials, including silicon carbide and gallium
nitride used in electric vehicles, low-power mobile antenna gear
and other energy-saving devices, helping to maintain its leading
global position in power-management chips, analysts said.
"We believe that the acquisition of Wolfspeed would have
been key for Infineon to maintain its technology leadership in
power semiconductor technology," Baader analyst Guenther
Hollfelder wrote in a note to clients on Thursday.
Wolfspeed compound semiconductor technologies promise to
give Infineon a leg-up as the electronics world shifts from a
reliance on silicon to embrace newer semiconductor materials,
including silicon carbide, he said.
Another broker, Credit Suisse, had estimated that Wolfspeed
could boost Infineon's compound annual growth rate over the next
two years by 2 percentage points to 13 percent and give a bigger
boost to earnings per share through the 2018 financial year.
Infineon stock fell 2.7 percent to 16.94 euros per share in
early trading in Frankfurt on Thursday.
The intervention of CFIUS is the latest blow to European
technology mergers because of action by the United States, which
has stepped up efforts to prevent the transfer of what it
considers to be sensitive technology, even when the deal
involves a traditional ally, such as Germany.
In December a government-backed Chinese investment fund
dropped a 670 million euro bid for Germany's Aixtron
after the United States blocked the deal on security grounds.
Its chip-making equipment was used to produce chips for Patriot
missile defence systems, among its many uses.
Wolfspeed would help Infineon in the electric car market,
where Japanese rival Rohm and Franco-Italian company
STMicroelectronics now lead in silicon carbide. It
could also help Infineon to drive down the costs of producing
silicon carbide parts, the Baader analyst said.
(1 euro = $1.0700)
(Reporting By Eric Auchard; Editing by David Goodman)