GlobalWafers (a Taiwanese business that manufactures silicon wafers used for computer chips) will no longer purchase a Munich-based competitor. SiltronicThe deal was rejected by German policymakers.

As nations seek to strengthen their tech sovereignty, the deal collapsed late Monday night. This is because they are no longer dependent on others for crucial technologies such as semiconductors. Europe relies heavily on Asia and the U.S., where companies such as Samsung, TSMCAnd Intel.

GlobalWafers’ takeover offer and all agreements resulting from it will not be finalized and they will expire.” GlobalWafers said Tuesday.

The German economic ministry failed to approve the deal worth 4.35 billion euros ($4.9 billion) by Jan. 31, meaning that the acquisition cannot proceed as planned.

“It was not possible to complete all the necessary review steps as part of the investment review — this applies in particular to the review of the antitrust approval by the Chinese authorities, which was only granted last week,” a spokesperson for Germany’s economy ministry said, according to Reuters.

On Jan. 21 Chinese regulators approved the takeover. It would have made China’s second largest maker of wafers measuring 300 millimeters, behind Japan’s Shin-Etsu.

GlobalWafers now need to pay Siltronic a 50 Million Euro termination fee

Wafers make up a major building block of chips, which are used in everything from iPhones to parking sensors.

Germany is where it all began. InfineonFollowing a global chip shortage that harmed the well-known automotive industry, chipmakers have been more cautious about their supply chain.

GlobalWafers would have to undergo an investment review, according to the ministry.

GlobalWafers CEO Doris Hsu said that it was disappointing and added that they will analyze the German government’s non-decisions to determine how this affects their future investments.

According to the company, Europe is still an important market. It remains committed towards the employees and customers in Europe.

Siltronic shares were trading higher than 2% on Tuesday morning at the Frankfurt Stock Exchange.

Other chip deals are being investigated by regulators and governments. Most notable is Nvidia’sSoftBank offers $40 billion for U.K. Chip Designer Arm.

Critics are concerned that the merger with Nvidia — which designs its own chips — could restrict access to Arm’s “neutral” semiconductor designs and may lead to higher prices, less choice and reduced innovation in the industry. Nvidia counters that this deal will result in more innovation, and Arm will reap the benefits of increased investment.