The UK government declined a Chinese firm’s acquisition of electronic design automation (EDA) software company Pulsic on August 17, citing potential threats and the violation of the National Security and Investment Act 2021, according to a Caixin report.

The UK government said that Pulsic owns EDA software that can be used for military purposes. The buyer, Super Orange HK (香港超橙控股) has been invested in by UniVista (合见工软) from China’s mainland, which focuses on EDA software. 

Super Orange HK was founded in 2021 by members of the Shanghai-based company. This is the second time the UK has called off a merger or acquisition from a Chinese firm by citing the act, which took effect in April 2021. 

The act covers 17 fields, including nuclear energy, AI, telecom, and semiconductors. The U.S. banned the exportation of EDA software for producing 3nm and more advanced chips to China on August 12, hindering the country’s progress toward more advanced chipmaking, said the Caixin report.