The issue CFIUS seems to have is that Lumileds’ product portfolio relies on compound semiconductor material gallium nitride (GaN) chips, which have significant military applications, including for radar systems for antiballistic missiles and in the U.S. Air Force's Space Fence orbital debris tracking system.
The first Chinese attempt to buy Lumileds collapsed in January 2016 when a consortium led by Go Scale Capital tried to acquire an 80.1% stake from Philips for $2.9 billion, with CFIUS blocking it over concerns about GaN technology transfer. Philips eventually sold the same stake to Apollo Global Management at a steep discount in 2017. Lumileds then filed for Chapter 11 bankruptcy in August 2022, exiting 63 days later. Sanan and Malaysian partner Inari Amertron announced their joint $239 million acquisition in August 2025, but even at a fraction of the original price, CFIUS wouldn’t allow it.
You may like U.S. lawmakers demand sales ban on chipmaking tools to China US senators want to suspend Nvidia AI chip export licenses to China and its intermediaries US Senators call for a halt to Nvidia GPU exports in the wake of the Super Micro scandal It’s not just Lumileds; compound semiconductors have been a consistent red line for CFIUS in other acquisition attempts. The committee blocked Fujian Grand Chip's attempted acquisition of German equipment maker Aixtron, for example, over the same GaN concerns, and effectively killed Infineon's proposed purchase of Wolfspeed from Cree over GaN-on-silicon-carbide technology.
CFIUS, as is usually the case, hasn’t disclosed its reasoning for blocking Sanan’s bid, but it’s easy to read between the lines. Lumileds operates across automotive lighting, display, and mobile markets, employing around 3,500 people in more than 15 countries, and its GaN expertise is a core part of the business.
For Sanan, this blocked acquisition caps off a brutal few months. In March, China's National Supervisory Commission detained the company's founder and controlling shareholder, Lin Xiucheng, for investigation. Sanan's share price hit consecutive daily limit-down drops, erasing roughly 13 billion yuan ($1.89 billion) in market capitalization within two days.
Then on April 7, Lin's son-in-law and the company's vice chairman and general manager, Lin Kechuang, was also placed under investigation by authorities in Chongqing. All 29.47% of company shares held by the Lin family's holding vehicles have been judicially frozen. Sanan said the failed deal won't materially affect its finances and that it would continue pursuing international expansion.
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Key considerations
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Reference reading
- https://www.tomshardware.com/tech-industry/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/us-blocks-chinese-acquisition-of-dutch-led-firm-lumileds-for-the-second-time#main
- https://www.tomshardware.com
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