1032-00004 · Client 1032 · Review & Investigation Responses

first-rfi-response-cover-letter.docx DOCUMENT M&A / Corporate

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CALDERWOOD & HARKNESS LLP ATTORNEYS AT LAW

1750 K Street NW, Suite 800 Washington, DC 20006 Telephone: (202) 555-7100 Facsimile: (202) 555-7199 www.calderwoodharkness.com

August 18, 2023

VIA HAND DELIVERY AND CFIUS SECURE PORTAL

Staff Chairperson Committee on Foreign Investment in the United States U.S. Department of the Treasury Office of Investment Security 1500 Pennsylvania Avenue NW Washington, DC 20220

Re: CFIUS Case No. CFIUS-023-07-3841 Supplemental Response to Request for Information dated August 4, 2023 — Acquisition of Marlowe Asset Management Photonics Inc. by Halcyon Semiconductor Aktiengesellschaft

Dear Staff Chairperson and Members of the Committee:

Calderwood & Harkness LLP serves as counsel to Halcyon Semiconductor Aktiengesellschaft ("HSAG"), a publicly traded Aktiengesellschaft organized under the laws of the Federal Republic of Germany and listed on the Frankfurt Stock Exchange (XETRA: HLC), with its principal offices and headquarters located at Industriestraße 44, 01099 Dresden, Saxony, Germany. On behalf of HSAG and the co-filing party, Marlowe Asset Management Photonics Inc. ("VPI"), a Delaware C-corporation headquartered at 7400 Ridgeline Parkway, Colorado Springs, Colorado 80919, this letter transmits supplemental materials responsive to the Committee on Foreign Investment in the United States' ("CFIUS" or the "Committee") Request for Information ("RFI") dated August 4, 2023, in connection with the above-referenced matter.

As the Committee is aware, HSAG and VPI jointly filed a voluntary notice (the "Joint Voluntary Notice") with CFIUS on July 14, 2023, pursuant to Section 721 of the Defense Production Act of 1950, as amended (50 U.S.C. § 4565), and the implementing regulations at 31 C.F.R. Part 800. The Joint Voluntary Notice was accepted by the Committee on July 21, 2023, thereby commencing the statutory forty-five (45) day review period under 31 C.F.R. § 800.503. This letter and the enclosed supplemental materials are submitted in timely response to the Committee's RFI dated August 4, 2023.

The preparation of this response has been closely coordinated with VPI's counsel, Harrison Whitfield, Partner, at Wethersfield & Gale LLP, 2000 Pennsylvania Avenue NW, Suite 600, Washington, DC 20006. Wethersfield & Gale LLP has reviewed the enclosed materials to the extent they implicate information within VPI's possession, custody, or control, and has confirmed the accuracy of such information as set forth in more detail below. VPI's management has cooperated fully in the preparation of this submission, and both parties remain committed to providing the Committee with all information necessary to complete its review.

I. Transaction Summary

By way of brief background, HSAG, through its wholly owned U.S. acquisition vehicle, Halcyon US Holdings Inc. ("Halcyon US"), a Delaware corporation formed on June 5, 2023, with a registered agent located at 160 Greentree Drive, Suite 101, Dover, Delaware 19904 (Employer Identification Number: 93-2841067), proposes to acquire one hundred percent (100%) of the outstanding equity interests of VPI (Employer Identification Number: 26-4371885) pursuant to the terms of a Stock Purchase Agreement dated June 10, 2023, as previously provided to the Committee as an exhibit to the Joint Voluntary Notice (the "Transaction"). The aggregate purchase price for the Transaction is approximately $1.42 billion in cash, payable on a cash-free, debt-free basis, with a normalized net working capital target of $34.6 million, subject to customary post-closing adjustments.

VPI is a leading designer and manufacturer of advanced gallium-nitride ("GaN") power amplifier chips and related compound semiconductor technologies used in defense radar systems, satellite communications platforms, and next-generation 5G wireless telecommunications infrastructure. VPI maintains a Facility Security Clearance ("FCL") at the SECRET level under the National Industrial Security Program (CAGE Code: 7VK92), is registered with the U.S. Department of State, Directorate of Defense Trade Controls ("DDTC") (Registration No. M-24817), and currently maintains fourteen (14) active contracts with the U.S. Department of Defense with an aggregate contract backlog of approximately $193 million. VPI employs a total of four hundred eighty-six (486) individuals across its facilities in Colorado Springs, Colorado and Tempe, Arizona, of whom two hundred twelve (212) hold active U.S. government personnel security clearances at the SECRET level or above.

II. Description of the Request for Information

HSAG acknowledges receipt of the Committee's RFI dated August 4, 2023, which contained thirty-four (34) enumerated questions directed to HSAG and, in certain instances, jointly to HSAG and VPI. The RFI addressed the following principal subject-matter categories:

(a) HSAG's relationships with German federal and state (Länder) government entities and institutions of the European Union, including any grants, subsidies, research collaborations, procurement relationships, or other arrangements involving governmental or quasi-governmental bodies;

(b) HSAG's enterprise cybersecurity practices and information technology infrastructure, including network architecture, data storage protocols, access controls, and vulnerability management programs;

(c) HSAG's proposed technology transfer protocols for VPI's controlled technical data following the closing of the Transaction, including measures to ensure compliance with the International Traffic in Arms Regulations ("ITAR"), 22 C.F.R. Parts 120–130, and the Export Administration Regulations ("EAR"), 15 C.F.R. Parts 730–774;

(d) HSAG's operations in, and commercial relationships with parties located in, the People's Republic of China ("PRC"), including the organizational structure, activities, personnel, and revenue of HSAG's Chinese subsidiary; and

(e) HSAG's proposed post-closing governance structure for VPI, including the composition of VPI's board of directors, management reporting lines, the role and authorities of any contemplated security officer or oversight committee, and the extent to which HSAG personnel will have access to VPI's classified programs, controlled technical data, and U.S. government customer relationships.

HSAG has endeavored to respond fully and completely to each of the thirty-four (34) questions contained in the RFI. Where a particular question required the production of documents, HSAG has identified and produced responsive documents as part of the enclosed Attachment 1 or, where appropriate, in the form of the standalone supplemental exhibits described below. Where a question required input or verification from VPI, HSAG has coordinated with VPI and its counsel at Wethersfield & Gale LLP to ensure the completeness and accuracy of the response.

III. Description of Enclosed Supplemental Materials

A. Attachment 1: Substantive Response Document

Enclosed under separate cover as Attachment 1 are detailed narrative responses to each of the thirty-four (34) questions set forth in the Committee's RFI, organized sequentially by question number, and collectively comprising the "Substantive Response." Each response includes cross-references to supporting documents and exhibits where applicable, and identifies the source of the information provided (i.e., whether derived from HSAG records, VPI records, publicly available sources, or a combination thereof).

The Substantive Response was prepared by the CFIUS team at Calderwood & Harkness LLP, consisting of the following attorneys:

• Margaret "Peggy" Ashworth, Of Counsel, National Security & CFIUS Practice Group;

• Lt. Col. (Ret.) David Caruso, Senior Counsel, Government Contracts & Export Controls Practice Group;

• Priya Venkataraman, Associate, International Trade & Sanctions Practice Group; and

• Kenneth Morales, Associate, Corporate/M&A Practice Group.

The Substantive Response was prepared in close consultation with senior management of HSAG, including HSAG's General Counsel, Stefan Lohse, and its Chief Information Security Officer, Dr. Ingrid Schmitz, as well as with VPI's counsel at Wethersfield & Gale LLP, specifically Harrison Whitfield and Sandra Niehaus.

B. Attachment 2: Supplemental Exhibit — HSAG Cybersecurity Program Overview

Enclosed as Attachment 2 is a comprehensive summary of HSAG's enterprise cybersecurity framework and information security program (the "Cybersecurity Program Overview"). This supplemental exhibit has been prepared in direct response to the Committee's inquiries regarding HSAG's information technology practices and its proposed approach to the management of VPI's IT systems and controlled technical data following the closing of the Transaction. The Cybersecurity Program Overview includes the following principal components:

(i) A detailed description of HSAG's ISO/IEC 27001:2022 certification, including the scope of the certification, the certifying body (Westvale Enterprises), the most recent recertification date (March 12, 2023), and the organizational units and information systems covered by the certification;

(ii) A summary of HSAG's data protection practices under the General Data Protection Regulation (Regulation (EU) 2016/679) ("GDPR") and applicable German federal data protection law (Bundesdatenschutzgesetz, "BDSG"), including the role and contact information of HSAG's designated Data Protection Officer;

(iii) A description of HSAG's incident response protocols, including escalation procedures, notification timelines, and coordination with relevant German and European cybersecurity authorities (including the Federal Office for Information Security, Bundesamt für Sicherheit in der Informationstechnik ("BSI"));

(iv) A detailed overview of the planned measures for the physical and logical segregation of VPI's IT systems, networks, and data repositories from HSAG's global corporate network following the closing of the Transaction, including the proposed use of dedicated, U.S.-based data centers, air-gapped network architectures for classified and ITAR-controlled environments, and role-based access controls restricting access to VPI technical data solely to U.S. persons as defined in 22 C.F.R. § 120.62; and

(v) A description of the third-party security assessment that HSAG has commissioned from Greaves Advisory Group (U.S. affiliate) to evaluate VPI's existing IT infrastructure and recommend any enhancements necessary to satisfy CFIUS mitigation expectations.

The Cybersecurity Program Overview is responsive principally to RFI Questions Nos. 14 through 22, which addressed HSAG's IT infrastructure, data security practices, and proposed post-closing information systems architecture for VPI.

C. Attachment 3: Supplemental Exhibit — HSAG China Operations Summary

Enclosed as Attachment 3 is a comprehensive disclosure regarding HSAG's operations in the People's Republic of China (the "China Operations Summary"). This supplemental exhibit has been prepared in direct response to the Committee's inquiries regarding HSAG's presence in China and its commercial relationships with PRC-based entities. The China Operations Summary addresses the following topics in detail:

(i) A complete organizational description of Halcyon Semiconductor (Shanghai) Co., Ltd. ("Halcyon Shanghai"), HSAG's wholly owned subsidiary organized under the laws of the PRC, including its registered address, date of incorporation, registered capital, current number of employees, and management structure;

(ii) A summary of the revenue and operational scope of Halcyon Shanghai, which generated total revenue of $81.4 million for fiscal year 2022, representing approximately 1.3% of HSAG's consolidated total revenue of €6.12 billion for the same period;

(iii) A detailed description of the scope of activities conducted by Halcyon Shanghai, which are limited exclusively to the design, marketing, and technical support of consumer-grade power management integrated circuits ("PMICs") for use in mobile handsets, consumer electronics, and automotive infotainment systems sold to PRC-based original equipment manufacturers;

(iv) An affirmative confirmation that no gallium-nitride semiconductor technology, defense-related semiconductor technology, dual-use semiconductor technology, or any technology subject to ITAR or EAR controls is designed, manufactured, tested, stored, transferred to, or otherwise made available through or in connection with Halcyon Shanghai or any other HSAG entity operating in the PRC; and

(v) A list of HSAG's material commercial relationships with PRC-based customers and suppliers, together with a representation that none of such parties appears on the U.S. Department of Commerce Bureau of Industry and Security Entity List (15 C.F.R. Part 744, Supplement No. 4), the U.S. Department of the Treasury Office of Foreign Assets Control Specially Designated Nationals and blocked Persons List, or the U.S. Department of Defense list of Chinese Military Companies under Section 1260H of the National Defense Authorization Act for Fiscal Year 2021.

The China Operations Summary is responsive principally to RFI Questions Nos. 26 through 31, which addressed HSAG's PRC operations, commercial relationships with PRC-based entities, and the potential for technology diversion to PRC end-users.

IV. Index of Attachments

The following materials are enclosed with this letter:

V. Reservation of Rights and Continuing Cooperation

HSAG and VPI hereby reserve the right to supplement or amend any information provided herein, in the enclosed Attachments, or in the original Joint Voluntary Notice filed July 14, 2023, as additional information becomes available or as may be necessary to ensure the continued accuracy and completeness of the record before the Committee. The parties understand their ongoing obligation under the CFIUS regulations to promptly advise the Committee of any material changes to the information previously provided.

Both HSAG and VPI reaffirm their commitment to full and transparent cooperation with the Committee throughout the pendency of the review process, including any investigation period that the Committee may elect to initiate pursuant to 31 C.F.R. § 800.504. The parties remain willing to participate in additional meetings, briefings, or information sessions with the Committee or individual member agencies at any time upon request.

The certifications provided by HSAG and VPI pursuant to 31 C.F.R. § 800.502 in connection with the original Joint Voluntary Notice remain in full force and effect and extend to the accuracy and completeness of all supplemental materials enclosed herewith. The undersigned counsel have reviewed the enclosed materials and, based upon reasonable inquiry, believe them to be accurate and complete in all material respects.

HSAG and VPI are available to respond to any follow-up questions, requests for additional documentation, or requests for meetings or telephonic conferences at the Committee's convenience. The parties are committed to working constructively with the Committee and stand ready to engage in good faith discussions regarding any mitigation measures that the Committee may determine to be appropriate.

VI. Confidentiality Notice

HSAG and VPI respectfully request that all materials enclosed with this letter, as well as the contents of this letter itself, be treated as business confidential information and be exempt from public disclosure under all applicable exemptions, including but not limited to Exemption 4 of the Freedom of Information Act, 5 U.S.C. § 552(b)(4) (trade secrets and commercial or financial information obtained from a person and privileged or confidential), and the confidentiality provisions of Section 721(c) of the Defense Production Act of 1950, as amended, 50 U.S.C. § 4565(c), which prohibit the disclosure of information filed with or provided to the Committee except as specifically authorized therein.

The parties further note that certain of the enclosed materials contain information that is subject to heightened sensitivity, including: (i) information regarding U.S. government classified programs in which VPI participates, which is referenced in summary form only and does not include any classified information; (ii) technical data that is controlled under the ITAR (22 C.F.R. Parts 120–130) or the EAR (15 C.F.R. Parts 730–774) and that constitutes controlled technical data or controlled unclassified information; and (iii) proprietary and competitively sensitive business information of both HSAG and VPI, the disclosure of which would cause substantial competitive harm to either party. HSAG and VPI respectfully request that the Committee take all appropriate measures to safeguard the confidentiality of the enclosed materials in accordance with applicable law and the Committee's internal procedures.

VII. Contact Information

For any questions regarding this submission or further requests for information, the Committee is respectfully invited to contact the following individuals:

Margaret "Peggy" Ashworth Of Counsel Calderwood & Harkness LLP 1750 K Street NW, Suite 800 Washington, DC 20006 Telephone: (202) 555-7142

Email: mashworth@calderwoodharkness.com

Beatrice Holloway Partner Calderwood & Harkness LLP 399 Park Avenue, 31st Floor New York, NY 10022 Telephone: (212) 555-3200

Email: bholloway@calderwoodharkness.com

The Committee is also requested to copy all correspondence and communications regarding this matter to:

Harrison Whitfield Partner Wethersfield & Gale LLP 2000 Pennsylvania Avenue NW, Suite 600 Washington, DC 20006 Telephone: (202) 555-4400

Email: hwhitfield@wethersfieldgale.com

(Counsel to Marlowe Asset Management Photonics Inc.)

We appreciate the Committee's attention to this submission and look forward to continuing our cooperative engagement throughout the review process.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Margaret "Peggy" Ashworth Of Counsel National Security & CFIUS Practice Group

Date: August 18, 2023

By: ________

Beatrice Holloway Partner

Date: August 18, 2023

On behalf of Halcyon Semiconductor Aktiengesellschaft and Halcyon US Holdings Inc.

cc:

Stefan Lohse, General Counsel, Halcyon Semiconductor AG, Industriestraße 44, 01099 Dresden, Germany Dr. Maximilian Ehrhardt, Chief Executive Officer, Halcyon Semiconductor AG Katarina Brückner, Chief Financial Officer, Halcyon Semiconductor AG Harrison Whitfield, Partner, Wethersfield & Gale LLP Sandra Niehaus, Partner, Wethersfield & Gale LLP Dr. Nathan Trevorrow, Chief Executive Officer, Marlowe Asset Management Photonics Inc. Lt. Col. (Ret.) David Caruso, Senior Counsel, Calderwood & Harkness LLP Priya Venkataraman, Associate, Calderwood & Harkness LLP Kenneth Morales, Associate, Calderwood & Harkness LLP James Prentice, Billing Partner, Calderwood & Harkness LLP

Enclosures:

Attachment 1 — Substantive Response to CFIUS Request for Information (34 questions) Attachment 2 — Supplemental Exhibit: HSAG Cybersecurity Program Overview Attachment 3 — Supplemental Exhibit: HSAG China Operations Summary

Delivery Method: Original and three (3) copies hand-delivered to the U.S. Department of the Treasury, Office of Investment Security. Electronic copies of all materials transmitted via the CFIUS secure portal.

Attachment	Description
Attachment 1	Substantive Response to CFIUS Request for Information (Responses to all 34 enumerated questions)
Attachment 2	Supplemental Exhibit — HSAG Cybersecurity Program Overview
Attachment 3	Supplemental Exhibit — HSAG China Operations Summary

CALDERWOOD & HARKNESS LLP ATTORNEYS AT LAW
1750 K Street NW, Suite 800 Washington, DC 20006 Telephone: (202) 555-7100 Facsimile: (202) 555-7199 www.calderwoodharkness.com
August 18, 2023
VIA HAND DELIVERY AND CFIUS SECURE PORTAL
Staff Chairperson Committee on Foreign Investment in the United States U.S. Department of the Treasury Office of Investment Security 1500 Pennsylvania Avenue NW Washington, DC 20220
Re: CFIUS Case No. CFIUS-023-07-3841 Supplemental Response to Request for Information dated August 4, 2023 — Acquisition of Marlowe Asset Management Photonics Inc. by Halcyon Semiconductor Aktiengesellschaft
Dear Staff Chairperson and Members of the Committee:
Calderwood & Harkness LLP serves as counsel to Halcyon Semiconductor Aktiengesellschaft ("HSAG"), a publicly traded Aktiengesellschaft organized under the laws of the Federal Republic of Germany and listed on the Frankfurt Stock Exchange (XETRA: HLC), with its principal offices and headquarters located at Industriestraße 44, 01099 Dresden, Saxony, Germany. On behalf of HSAG and the co-filing party, Marlowe Asset Management Photonics Inc. ("VPI"), a Delaware C-corporation headquartered at 7400 Ridgeline Parkway, Colorado Springs, Colorado 80919, this letter transmits supplemental materials responsive to the Committee on Foreign Investment in the United States' ("CFIUS" or the "Committee") Request for Information ("RFI") dated August 4, 2023, in connection with the above-referenced matter.
As the Committee is aware, HSAG and VPI jointly filed a voluntary notice (the "Joint Voluntary Notice") with CFIUS on July 14, 2023, pursuant to Section 721 of the Defense Production Act of 1950, as amended (50 U.S.C. § 4565), and the implementing regulations at 31 C.F.R. Part 800. The Joint Voluntary Notice was accepted by the Committee on July 21, 2023, thereby commencing the statutory forty-five (45) day review period under 31 C.F.R. § 800.503. This letter and the enclosed supplemental materials are submitted in timely response to the Committee's RFI dated August 4, 2023.
The preparation of this response has been closely coordinated with VPI's counsel, Harrison Whitfield, Partner, at Wethersfield & Gale LLP, 2000 Pennsylvania Avenue NW, Suite 600, Washington, DC 20006. Wethersfield & Gale LLP has reviewed the enclosed materials to the extent they implicate information within VPI's possession, custody, or control, and has confirmed the accuracy of such information as set forth in more detail below. VPI's management has cooperated fully in the preparation of this submission, and both parties remain committed to providing the Committee with all information necessary to complete its review.
I. Transaction Summary
By way of brief background, HSAG, through its wholly owned U.S. acquisition vehicle, Halcyon US Holdings Inc. ("Halcyon US"), a Delaware corporation formed on June 5, 2023, with a registered agent located at 160 Greentree Drive, Suite 101, Dover, Delaware 19904 (Employer Identification Number: 93-2841067), proposes to acquire one hundred percent (100%) of the outstanding equity interests of VPI (Employer Identification Number: 26-4371885) pursuant to the terms of a Stock Purchase Agreement dated June 10, 2023, as previously provided to the Committee as an exhibit to the Joint Voluntary Notice (the "Transaction"). The aggregate purchase price for the Transaction is approximately $1.42 billion in cash, payable on a cash-free, debt-free basis, with a normalized net working capital target of $34.6 million, subject to customary post-closing adjustments.
VPI is a leading designer and manufacturer of advanced gallium-nitride ("GaN") power amplifier chips and related compound semiconductor technologies used in defense radar systems, satellite communications platforms, and next-generation 5G wireless telecommunications infrastructure. VPI maintains a Facility Security Clearance ("FCL") at the SECRET level under the National Industrial Security Program (CAGE Code: 7VK92), is registered with the U.S. Department of State, Directorate of Defense Trade Controls ("DDTC") (Registration No. M-24817), and currently maintains fourteen (14) active contracts with the U.S. Department of Defense with an aggregate contract backlog of approximately $193 million. VPI employs a total of four hundred eighty-six (486) individuals across its facilities in Colorado Springs, Colorado and Tempe, Arizona, of whom two hundred twelve (212) hold active U.S. government personnel security clearances at the SECRET level or above.
II. Description of the Request for Information
HSAG acknowledges receipt of the Committee's RFI dated August 4, 2023, which contained thirty-four (34) enumerated questions directed to HSAG and, in certain instances, jointly to HSAG and VPI. The RFI addressed the following principal subject-matter categories:
(a) HSAG's relationships with German federal and state (Länder) government entities and institutions of the European Union, including any grants, subsidies, research collaborations, procurement relationships, or other arrangements involving governmental or quasi-governmental bodies;
(b) HSAG's enterprise cybersecurity practices and information technology infrastructure, including network architecture, data storage protocols, access controls, and vulnerability management programs;
(c) HSAG's proposed technology transfer protocols for VPI's controlled technical data following the closing of the Transaction, including measures to ensure compliance with the International Traffic in Arms Regulations ("ITAR"), 22 C.F.R. Parts 120–130, and the Export Administration Regulations ("EAR"), 15 C.F.R. Parts 730–774;
(d) HSAG's operations in, and commercial relationships with parties located in, the People's Republic of China ("PRC"), including the organizational structure, activities, personnel, and revenue of HSAG's Chinese subsidiary; and
(e) HSAG's proposed post-closing governance structure for VPI, including the composition of VPI's board of directors, management reporting lines, the role and authorities of any contemplated security officer or oversight committee, and the extent to which HSAG personnel will have access to VPI's classified programs, controlled technical data, and U.S. government customer relationships.
HSAG has endeavored to respond fully and completely to each of the thirty-four (34) questions contained in the RFI. Where a particular question required the production of documents, HSAG has identified and produced responsive documents as part of the enclosed Attachment 1 or, where appropriate, in the form of the standalone supplemental exhibits described below. Where a question required input or verification from VPI, HSAG has coordinated with VPI and its counsel at Wethersfield & Gale LLP to ensure the completeness and accuracy of the response.
III. Description of Enclosed Supplemental Materials
A. Attachment 1: Substantive Response Document
Enclosed under separate cover as Attachment 1 are detailed narrative responses to each of the thirty-four (34) questions set forth in the Committee's RFI, organized sequentially by question number, and collectively comprising the "Substantive Response." Each response includes cross-references to supporting documents and exhibits where applicable, and identifies the source of the information provided (i.e., whether derived from HSAG records, VPI records, publicly available sources, or a combination thereof).
The Substantive Response was prepared by the CFIUS team at Calderwood & Harkness LLP, consisting of the following attorneys:
•  Margaret "Peggy" Ashworth, Of Counsel, National Security & CFIUS Practice Group;
•  Lt. Col. (Ret.) David Caruso, Senior Counsel, Government Contracts & Export Controls Practice Group;
•  Priya Venkataraman, Associate, International Trade & Sanctions Practice Group; and
•  Kenneth Morales, Associate, Corporate/M&A Practice Group.
The Substantive Response was prepared in close consultation with senior management of HSAG, including HSAG's General Counsel, Stefan Lohse, and its Chief Information Security Officer, Dr. Ingrid Schmitz, as well as with VPI's counsel at Wethersfield & Gale LLP, specifically Harrison Whitfield and Sandra Niehaus.
B. Attachment 2: Supplemental Exhibit — HSAG Cybersecurity Program Overview
Enclosed as Attachment 2 is a comprehensive summary of HSAG's enterprise cybersecurity framework and information security program (the "Cybersecurity Program Overview"). This supplemental exhibit has been prepared in direct response to the Committee's inquiries regarding HSAG's information technology practices and its proposed approach to the management of VPI's IT systems and controlled technical data following the closing of the Transaction. The Cybersecurity Program Overview includes the following principal components:
(i) A detailed description of HSAG's ISO/IEC 27001:2022 certification, including the scope of the certification, the certifying body (Westvale Enterprises), the most recent recertification date (March 12, 2023), and the organizational units and information systems covered by the certification;
(ii) A summary of HSAG's data protection practices under the General Data Protection Regulation (Regulation (EU) 2016/679) ("GDPR") and applicable German federal data protection law (Bundesdatenschutzgesetz, "BDSG"), including the role and contact information of HSAG's designated Data Protection Officer;
(iii) A description of HSAG's incident response protocols, including escalation procedures, notification timelines, and coordination with relevant German and European cybersecurity authorities (including the Federal Office for Information Security, Bundesamt für Sicherheit in der Informationstechnik ("BSI"));
(iv) A detailed overview of the planned measures for the physical and logical segregation of VPI's IT systems, networks, and data repositories from HSAG's global corporate network following the closing of the Transaction, including the proposed use of dedicated, U.S.-based data centers, air-gapped network architectures for classified and ITAR-controlled environments, and role-based access controls restricting access to VPI technical data solely to U.S. persons as defined in 22 C.F.R. § 120.62; and
(v) A description of the third-party security assessment that HSAG has commissioned from Greaves Advisory Group (U.S. affiliate) to evaluate VPI's existing IT infrastructure and recommend any enhancements necessary to satisfy CFIUS mitigation expectations.
The Cybersecurity Program Overview is responsive principally to RFI Questions Nos. 14 through 22, which addressed HSAG's IT infrastructure, data security practices, and proposed post-closing information systems architecture for VPI.
C. Attachment 3: Supplemental Exhibit — HSAG China Operations Summary
Enclosed as Attachment 3 is a comprehensive disclosure regarding HSAG's operations in the People's Republic of China (the "China Operations Summary"). This supplemental exhibit has been prepared in direct response to the Committee's inquiries regarding HSAG's presence in China and its commercial relationships with PRC-based entities. The China Operations Summary addresses the following topics in detail:
(i) A complete organizational description of Halcyon Semiconductor (Shanghai) Co., Ltd. ("Halcyon Shanghai"), HSAG's wholly owned subsidiary organized under the laws of the PRC, including its registered address, date of incorporation, registered capital, current number of employees, and management structure;
(ii) A summary of the revenue and operational scope of Halcyon Shanghai, which generated total revenue of $81.4 million for fiscal year 2022, representing approximately 1.3% of HSAG's consolidated total revenue of €6.12 billion for the same period;
(iii) A detailed description of the scope of activities conducted by Halcyon Shanghai, which are limited exclusively to the design, marketing, and technical support of consumer-grade power management integrated circuits ("PMICs") for use in mobile handsets, consumer electronics, and automotive infotainment systems sold to PRC-based original equipment manufacturers;
(iv) An affirmative confirmation that no gallium-nitride semiconductor technology, defense-related semiconductor technology, dual-use semiconductor technology, or any technology subject to ITAR or EAR controls is designed, manufactured, tested, stored, transferred to, or otherwise made available through or in connection with Halcyon Shanghai or any other HSAG entity operating in the PRC; and
(v) A list of HSAG's material commercial relationships with PRC-based customers and suppliers, together with a representation that none of such parties appears on the U.S. Department of Commerce Bureau of Industry and Security Entity List (15 C.F.R. Part 744, Supplement No. 4), the U.S. Department of the Treasury Office of Foreign Assets Control Specially Designated Nationals and blocked Persons List, or the U.S. Department of Defense list of Chinese Military Companies under Section 1260H of the National Defense Authorization Act for Fiscal Year 2021.
The China Operations Summary is responsive principally to RFI Questions Nos. 26 through 31, which addressed HSAG's PRC operations, commercial relationships with PRC-based entities, and the potential for technology diversion to PRC end-users.
IV. Index of Attachments
The following materials are enclosed with this letter:
V. Reservation of Rights and Continuing Cooperation
HSAG and VPI hereby reserve the right to supplement or amend any information provided herein, in the enclosed Attachments, or in the original Joint Voluntary Notice filed July 14, 2023, as additional information becomes available or as may be necessary to ensure the continued accuracy and completeness of the record before the Committee. The parties understand their ongoing obligation under the CFIUS regulations to promptly advise the Committee of any material changes to the information previously provided.
Both HSAG and VPI reaffirm their commitment to full and transparent cooperation with the Committee throughout the pendency of the review process, including any investigation period that the Committee may elect to initiate pursuant to 31 C.F.R. § 800.504. The parties remain willing to participate in additional meetings, briefings, or information sessions with the Committee or individual member agencies at any time upon request.
The certifications provided by HSAG and VPI pursuant to 31 C.F.R. § 800.502 in connection with the original Joint Voluntary Notice remain in full force and effect and extend to the accuracy and completeness of all supplemental materials enclosed herewith. The undersigned counsel have reviewed the enclosed materials and, based upon reasonable inquiry, believe them to be accurate and complete in all material respects.
HSAG and VPI are available to respond to any follow-up questions, requests for additional documentation, or requests for meetings or telephonic conferences at the Committee's convenience. The parties are committed to working constructively with the Committee and stand ready to engage in good faith discussions regarding any mitigation measures that the Committee may determine to be appropriate.
VI. Confidentiality Notice
HSAG and VPI respectfully request that all materials enclosed with this letter, as well as the contents of this letter itself, be treated as business confidential information and be exempt from public disclosure under all applicable exemptions, including but not limited to Exemption 4 of the Freedom of Information Act, 5 U.S.C. § 552(b)(4) (trade secrets and commercial or financial information obtained from a person and privileged or confidential), and the confidentiality provisions of Section 721(c) of the Defense Production Act of 1950, as amended, 50 U.S.C. § 4565(c), which prohibit the disclosure of information filed with or provided to the Committee except as specifically authorized therein.
The parties further note that certain of the enclosed materials contain information that is subject to heightened sensitivity, including: (i) information regarding U.S. government classified programs in which VPI participates, which is referenced in summary form only and does not include any classified information; (ii) technical data that is controlled under the ITAR (22 C.F.R. Parts 120–130) or the EAR (15 C.F.R. Parts 730–774) and that constitutes controlled technical data or controlled unclassified information; and (iii) proprietary and competitively sensitive business information of both HSAG and VPI, the disclosure of which would cause substantial competitive harm to either party. HSAG and VPI respectfully request that the Committee take all appropriate measures to safeguard the confidentiality of the enclosed materials in accordance with applicable law and the Committee's internal procedures.
VII. Contact Information
For any questions regarding this submission or further requests for information, the Committee is respectfully invited to contact the following individuals:
Margaret "Peggy" Ashworth Of Counsel Calderwood & Harkness LLP 1750 K Street NW, Suite 800 Washington, DC 20006 Telephone: (202) 555-7142
Email: mashworth@calderwoodharkness.com
Beatrice Holloway Partner Calderwood & Harkness LLP 399 Park Avenue, 31st Floor New York, NY 10022 Telephone: (212) 555-3200
Email: bholloway@calderwoodharkness.com
The Committee is also requested to copy all correspondence and communications regarding this matter to:
Harrison Whitfield Partner Wethersfield & Gale LLP 2000 Pennsylvania Avenue NW, Suite 600 Washington, DC 20006 Telephone: (202) 555-4400
Email: hwhitfield@wethersfieldgale.com
(Counsel to Marlowe Asset Management Photonics Inc.)
We appreciate the Committee's attention to this submission and look forward to continuing our cooperative engagement throughout the review process.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Margaret "Peggy" Ashworth Of Counsel National Security & CFIUS Practice Group
Date: August 18, 2023
By: ________
Beatrice Holloway Partner
Date: August 18, 2023
On behalf of Halcyon Semiconductor Aktiengesellschaft and Halcyon US Holdings Inc.
cc:
Stefan Lohse, General Counsel, Halcyon Semiconductor AG, Industriestraße 44, 01099 Dresden, Germany Dr. Maximilian Ehrhardt, Chief Executive Officer, Halcyon Semiconductor AG Katarina Brückner, Chief Financial Officer, Halcyon Semiconductor AG Harrison Whitfield, Partner, Wethersfield & Gale LLP Sandra Niehaus, Partner, Wethersfield & Gale LLP Dr. Nathan Trevorrow, Chief Executive Officer, Marlowe Asset Management Photonics Inc. Lt. Col. (Ret.) David Caruso, Senior Counsel, Calderwood & Harkness LLP Priya Venkataraman, Associate, Calderwood & Harkness LLP Kenneth Morales, Associate, Calderwood & Harkness LLP James Prentice, Billing Partner, Calderwood & Harkness LLP
Enclosures:
Attachment 1 — Substantive Response to CFIUS Request for Information (34 questions) Attachment 2 — Supplemental Exhibit: HSAG Cybersecurity Program Overview Attachment 3 — Supplemental Exhibit: HSAG China Operations Summary
Delivery Method: Original and three (3) copies hand-delivered to the U.S. Department of the Treasury, Office of Investment Security. Electronic copies of all materials transmitted via the CFIUS secure portal.
Attachment | Description
Attachment 1 | Substantive Response to CFIUS Request for Information (Responses to all 34 enumerated questions)
Attachment 2 | Supplemental Exhibit — HSAG Cybersecurity Program Overview
Attachment 3 | Supplemental Exhibit — HSAG China Operations Summary

CALDERWOOD & HARKNESS LLP ATTORNEYS AT LAW

VIA HAND DELIVERY AND CFIUS SECURE PORTAL

CALDERWOOD & HARKNESS LLP

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