ICBC provides loan to Xichanweixin to support its acquisition of a 100% equity stake in Ampleon (Linked to Record ID#102547 and #102600)

Project narrative

In 2022, the Jiangsu Branch of the Industrial and Commercial Bank of China (ICBC) issued a loan to Wuxi Xichanweixin Semiconductor Co., Ltd. — a Chinese state-backed semiconductor and chip company based in Wuxi, Jiangsu Province with its largest shareholder being Wuxi Industry Development Group Co., Ltd. (an entity owned by the Wuxi Government) — to support its acquisition of a 100% stake in Ampleon Coöperatief U.A. (a Netherlands-incorporated and headquartered semiconductor company and the former radio frequency business of NXP Semiconductors N.V.) for a consideration of over $1.48 billion USD. The previous owners (and assumed vendors) of Ampleon were Beijing JianGuang Asset Management Co., Ltd. (JAC Capital) — a Chinese state-owned investment company and private equity firm (77.41% stake) and China Wealth Growth Fund II L.P. — a Cayman Islands-incorporated special purpose vehicle (SPV) of Chinese private equity firm Wise Road Capital LT — (22.59% stake). Ampleon was the world's second largest radio frequency power company in the world, supplying RF chips for mobile base stations. The acquisition was expected to allow Xichanweixin to become the world's second largest supplier of RF components for mobile base stations, allowing it to participate in the global 5G construction wave and help provide domestic semiconductor substitutes to China. The acquisition was completed on July 18, 2022. This acquisition was the largest Chinese acquisition in Europe in 2022. Ampleon, originally the RF Business of NXP Semiconductors N.V., was acquired by Chinese state-owned investment company and private equity firm Beijing JianGuang Asset Management Co., Ltd. (JAC Capital) and China Wealth Growth Fund II L.P. in 2015, funded by a $600 million USD loan provided by a syndicate including the Bank of China (BOC) (Record ID#102547) and the Export-Import Bank of China (Record ID#102600). Ampleon produces radio frequency power chip (RF) semiconductors that make wireless signals more powerful used in microwaves, telecommunications equipment, radar system, and other military purposes. Its products required special manufacturing technology and knowledge that only a few companies in the world could do it. Given that its technology were crucial to mobile phones and that Ampleon supplied technology used for military purposes, Ampleon was viewed as a strategic asset by observers, and that China's possession of it were seen as politically sensitive. While owned by Chinese entities (including state-backed JAC Capital for two years), the acquisition by Xichanweixin raised more questions. For one, the acquisition was not publicized. Xichanweixin or Ampleon did not release any press releases announcing it, despite the acquisition being the largest Chinese investment in Europe in 2022, and the acquisition was only mentioned in passing in Ampleon's 2022 annual report. Ampleon collaborators reportedly were not informed of the takeover until well afterwards. When asked by the media about the lack of publicity, a spokesperson for the company responded that "We did not feel it necessary to publicize it" and that "It makes no difference to the company's strategy.". Another concern was that Xichanweixin itself is an unknown company in the semiconductor industry. Also operating under the name Sparc, Wuxi acquired a stake in Chinese chip company Semiconductor Manufacturing International Corporation (SMIC); supply of certain advanced technology to SMIC is prohibited by the governments of the Netherlands and the United States, among others. A broad concern among Dutch government agencies was the national security concerns of technology transfer to China, siphoning knowledge and technology and leading to economic dependence on it for products. A number of observers believed that Chinese ownership of Ampleon, which was participating in a project financed Dutch Government's National Growth Fund for 6G wireless Internet technology, was leading to knowledge extraction. The Netherlands' Ministry of Economic Affairs and Climate Policy, which in summer 2023 received authority from a new law to scrutinize and stop takeovers of companies involving sensitive technology, even retroactively. While Ampleon already had Chinese ownership, the ministry had investigated cases where companies went from one Chinese company to another.