China: Issued conditional approval for the acquisition of Silicon Motion (Huirong Technology) by MaxLinear

On 26 July 2023, China’s State Administration for Market Regulation (SAMR) conditionally approved the acquisition of Silicon Motion (Huirong Technology), a producer of NAND flash controllers, by MaxLinear, a semiconductor company, after finalising an anti-monopoly review on the transaction. The investigation found that the concentration of business operators may have the effect of eliminating or restricting competition in the NAND flash memory market in China. The relevant market was found to be highly concentrated, while downstream customers heavily rely on Silicon Motion, making it difficult for third parties to switch suppliers. Additionally, entering the relevant market poses substantial obstacles for competitors. As a consequence, the SAMR approved the acquisition with certain conditions aimed at maintaining fair competition and product supply stability. The approved conditions include requirements to continue supplying NAND flash memory main control chip products to China in a fair manner, maintain Silicon Motion's R&D in Taiwan, maintain the existing business model and operation of Silicon Motion, and ensure that no malicious code is added to the NAND flash memory main control chip sold in China. The commitment plan is legally binding for 5 years.