Finnish semiconductor company Beneq acquired by Chinese firms with state links

The acquisition

On September 28, 2018, Beneq was acquired by the Chinese company, Qingdao Sifang SRI Intellectual Technology Co. Ltd. (SRI Intellectual). Beneq, a Finnish company founded in 2005, 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

Beneq is an established company in the field of Atomic Layer Deposition (ALD) equipment and R&D. ALD is a thin film deposition or coating technique, applied in next-generation technology manufacturing such as semiconductors, 5G, and the Internet of Things. ALD is 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 electroluminescent (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 that aim to support the company’s rapid development.

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 internationalization of the firm.

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 defense 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 with a significant military applicable-technology naturally raise concerns about European security and the post-acquisition use case of Beneq’s technologies.

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, Beneq.

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 the execution of 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.