Finnish semiconductor company Beneq acquired by Chinese firms with state links

At Datenna, our China experts continuously track and conduct detailed investigations into the acquisitions of European and US firms by Chinese entities. Through a series of articles in our resource library, we highlight striking acquisition case studies, analysed based on Datenna's in-depth, unique data on China's techno-economic landscape. This article elaborates on the acquisition of the Finnish company Beneq.

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The Acquisition

On September 28, 2018, Finnish company Beneq was acquired by the Chinese company Qingdao Sifang SRI Intellectual Technology Co. Ltd. (SRI Intellectual). Beneq is a renowned provider of thin film Atomic Layer Deposition (ALD) equipment and R&D for the semiconductor industry, as well as the number one producer of transparent electroluminescent (EL) displays globally. The new owner, SRI Intellectual, is a high-end supplier of intelligent technology solutions. The financial details of the sale remained undisclosed.

Beneq's Key Technologies

The ALD equipment Beneq specialises in is a key part in next-generation technology manufacturing, such as semiconductors, 5G, and the Internet of Things. It is therefore essential in chip miniaturization and the advancement of nanotechnology, both of which underpin the latest innovations shaping our digital age. Beneq also produces some of the world's most transparent and durable EL displays, with growing applications across a wide spectrum of industries, from civilian and military vehicles to optical devices.

The Chinese Buyer

The acquirer, SRI Intellectual, focuses on the R&D and production of semiconductor process equipment, and actively explores strategic emerging industries with the aim of fostering growth and future development. Since 2018, SRI Intellectual has channeled over 20 million euros into Beneq, extending its capacities for semiconductor-related productions, including over 2 million euros in investments in new clean room facilities.

SRI Intellectual is resolutely committed to nurturing Beneq's growth, establishing it as a dominant player in the market. The acquisition serves as a strategic gateway for SRI Intellectual to expand its horizons beyond China's borders, creating a base for the internationalisation of the firm.

Government Links and Military Tech

SRI Intellectual displays relevant connections to China's domestic technology industry. This is exemplified through one of its major indirect shareholders, the Guohua Military-Civilian Integration Industry Development Fund. Established in 2016, this government-backed investment fund plays a pivotal role in the Chinese government's strategy of directing more investments into the defence sector while simultaneously supporting other emerging industries. It constitutes a fundamental element of China's Military-Civil Fusion Strategy, which strives to ensure that new innovations concurrently drive economic and military progress.

As part of this overarching strategy, the Chinese government frequently engages in the acquisition of high-tech foreign firms to glean novel technological insights. Acquisitions involving technology with significant military applicability naturally raise concerns about European security and the post-acquisition use case of Beneq's technologies.

CRRC Sifang Institute Co., Ltd.

The other major shareholder, CRRC Sifang Institute Co., Ltd., is entirely owned by CRRC Corporation Limited, which in turn is predominantly owned by the CRRC Group — an entity overseen by the State-owned Assets Supervision and Administration Commission of the State Council. This structure implies that China's State Council has a substantial influence on SRI Intellectual, and by extension, on Beneq.

Acquisition of Key Technologies

Under the Made in China 2025 plan, a pivotal objective of China's national strategy is self-sufficiency in essential technologies as well as becoming a global hub for innovation and high-tech development. The acquisition of foreign companies to acquire technological knowledge and production capacity serves as a key instrument in this strategy. Semiconductors are an essential component of China's quest for self-sufficiency in advanced technologies, making the acquisition of Beneq a key example of China's pursuit of critical technology.