CFIUS Prepares To Block Semiconductor Sale To Chinese Entity

As close observers of the Committee on Foreign Investment in the United States ("CFIUS" or "Committee") are aware, the Committee has the authority to recommend that the President of the United States block a transaction on national security grounds. Although it is rare for CFIUS to make such a recommendation, that is exactly what occurred this week to Magnachip Semiconductor Corporation ("Magnachip"), a South Korean chip manufacturer. The Committee's action signals that companies operating overseas with even a limited nexus to the United States need to undertake CFIUS due diligence before engaging in a transaction in sectors—like semiconductors—that implicate the U.S. government's core national security concerns.