Top chip supplier under investigation in France for alleged smuggling to China and Russia

In an investigation into a top chip supplier whose cutting-edge technology with potential military applications was reportedly smuggled to China and Russia.

In an investigation into a top chip supplier whose cutting-edge technology with potential military applications was reportedly smuggled to China and Russia, allegedly breaking sanctions and export controls, French magistrates have filed preliminary charges against two Chinese citizens and two other French citizens. The French national prosecution office, which specializes in crimes involving arms proliferation, opened an investigation into Ommic, a semiconductor firm based in the Paris region that is currently controlled by the United States.

According to a French court official who spoke on the condition of anonymity due to the secrecy restrictions covering magistrates’ investigations, the investigation is currently being headed by magistrates looking into alleged illicit exports, forgeries, and other suspected offences. Four people, two French and two Chinese, have reportedly been the subject of formal investigations since March, according to the official. That indicates that although the magistrates are confident there is strong evidence of potential crimes, they still need more time to look into it.

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According to the judicial official, two of the four suspects are facing preliminary allegations of providing protected know-how to a foreign power. The representative and the prosecution service, which also specializes in terrorism cases, declined to provide more specifics regarding the inquiry. The incident was initially covered by the journal Le Parisien. It claimed that investigators had identified suspected technology exports worth nearly 12 million euros (more than $13 million). According to the report, the French manager of the business is thought to have personally delivered chips to Russian customers. It claimed that goods were also exported to Chinese arms makers using fake documentation.

A Beijing-based Chinese investor with connections to China’s defense sector, according to the publication, purchased a controlling stake and assumed control of Ommic in 2018. According to the publication, France’s counter-espionage agency believes the Chinese investor was attempting to transfer French knowledge to China, particularly a semiconductor manufacturing method Ommic specializes in.

Ommic was going to be purchased by Macom Technology Solutions Holdings Inc for $38.5 million ($42.8 million), a Lowell, Massachusetts-based semiconductor supplier, in February. The Chinese investor in Ommic had his interest taken away by French legal authorities, according to Le Parisien, who also temporarily took over control of the business before selling it. Its position in the telecommunications, industrial, aerospace, and defense markets would be strengthened, according to Macom, thanks to Ommic’s chip portfolio and design expertise.