Partner and Executive Director of Jingsh Law Firm Maxim Slugin commented to Kommersant on the potential acquisition of stakes in Chinese semiconductor fabs by Russian investors.

Kommersant published an article titled “Shares for Chips” about the United Microelectronics Company’s plans to consider acquiring stakes in Chinese enterprises. Equity participation is expected to help Russian customers secure reliable access to production capacity and agree on terms for long-term cooperation.

According to the publication’s sources, the discussions concern stakes in smaller fabs serving the Chinese and Russian markets. The arrangements could include allocating dedicated production lines to Russian orders. The investment amounts and number of transactions have yet to be determined.

Maxim Slugin noted that acquiring a stake can strengthen a partnership, provide a role in the fab’s management and give access to certain internal information. These opportunities arise from equity participation in the business.

Access to patents, know-how and technical documentation requires separate contractual arrangements. According to Maxim, technology transfers must be governed by specific agreements: acquiring shares does not guarantee an investor unrestricted access to a Chinese manufacturer’s technology.

Maxim Slugin also explained that Chinese fabs can accept Russian investment, although an individual enterprise may decline a particular investor, especially one with government ties or subject to sanctions.

To read Maxim Slugin’s full comments and the article, please follow the link.

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Jingsh Russia is a cross-border team advising on projects involving Russia, mainland China and Hong Kong.

Jingsh’s head office has a professional legal team of at least 8,000 people, including more than 400 partners and over 6,000 practising lawyers.