Technology stocks backed down from moderate gains from earlier today, with shares of tech companies in the S&P 500 hanging on to a 0.1% increase.

In company news, Lattice Semiconductor Corp (LSCC) shares retreated Monday after reports the chipmaker’s would-be buyer is partially funded by the Chinese central government, increasing potential scrutiny of the $1.3 billion acquisition by U.S. officials.

Lattice shares jumped to a 30-month high earlier this month after Canyon Bridge Capital Partners proposed a $8.30 per share cash buyout, a 30% premium to the company’s Nov. 2 closing price. But following a review of about a dozen Chinese corporate register filings, Reuters is now reporting Canyon Bridge received a financial investment from China’s State Council, the top decision-making body of the government.

The buyout fund also has indirect ties to the Chinese space program, according to Reuters. The Committee on Foreign Investment in the United States has not yet ruled on the Lattice acquisition but the panel’s decision will, at least in part, turn of the potential military applications of the company’s technology. The U.S. military has not used the field programmable gate arrays made by Lattice that allow customers to put their software on silicon chips although the Pentagon is buying similar technology from both of the company’s largest rivals – Xilinx (XLNX) and Intel’s (INTC) Altera unit.

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