On the heels of the Qualcomm imbroglio where China’s anti-trust regulator is seeking to clip Qualcomm’s wings in its royalty extraction process, another warning light is flashing – Applied Materials and Tokyo Electron have had to re-file their application for the approval of their merger in China.
The ostensible reason is “to allow additional time to engage in constructive dialogue with the Ministry of Commerce,” says Applied.
Like Qualcomm, Applied, the No.1 maker of chip manufacturing equipment and Tokyo Electron the No.2, have technology vital to the growth of China’s semiconductor sector.
Applied and Tokyo Electron may be asked to supply or license their technology on favourable terms to Chinese companies in return for the granting of MoC approval.
Other US companies to attract China’s ire are Apple, accused of putting back-doors on iPhones; IBM, because the use of its servers in China banks may be a security risk, and Microsoft whose Chinese officers were raided by 100 government agents earlier this week in a hunt for evidence that the company is operating a monopoly in China.
Of course America has been playing a similar game – banning Huawei equipment, accusing five Chinese military men of stealing US secrets, and perennially moaning about China’s cyber-spying.
However, post-Snowden, America can’t claim the moral high-ground.