Exclusive | Chinese semiconductor buyout fund says it follows ‘market logic’, not Beijing’s orders, as US reviews its South Korean chip deal
- The Beijing-based firm came under the spotlight after it announced its intention to purchase South Korea’s Magnachip Semiconductor for US$1.4 billion
- Wise Road Capital said it does not have a specific strategy of moving production into China after acquiring foreign semiconductor assets
Wise Road Capital, the Chinese private equity fund that triggered a US national security review after it bid for a prized South Korean chip firm, said it follows market principles and does not take orders from Beijing when it comes to foreign investments.
In an exclusive interview with the South China Morning Post on Tuesday, Michael Zhang, the fund’s founding partner, said the firm follows “market logic” in screening deals and pursues profits for its investors, which include financial institutions, multinational companies and family offices.
The Beijing-based firm came under the spotlight after it announced in March its intention to purchase South Korea’s Magnachip Semiconductor Corp for US$1.4 billion. The deal raised eyebrows in Seoul and Washington, with the US Committee on Foreign Investment (CFIUS) stepping in.
The review marked Washington’s latest attempt to exert long-arm control over Chinese merger deals as Magnachip, a spin-off from Hynix Semiconductor, has little business presence in the US.
Magnachip said earlier the deal does not require US scrutiny as its operations are mainly in South Korea, while almost all of its sales and employees are in Asia and Germany. However, the company is listed on the New York Stock Exchange, giving CFIUS grounds to look into the deal.