Fairchild Semiconductor International Inc. received an unsolicited acquisition proposal of $21.70 a share that could threaten the company's previously announced deal to be acquired by fellow chip company ON Semiconductor Corp. for $20 a share.

The latest offer is from an investor group led by the semiconductor business of Chinese state-controlled conglomerate China Resources Holdings Co., according to a person familiar with the matter.

In a news release Tuesday, Fairchild said its board would carefully review and consider the latest proposal, but that its board hasn't changed its recommendation in favor of the company's deal with ON Semiconductor.

The Silicon Valley chip maker's shares rose 5.5% to $20.60 in recent trading, reflecting the offer.

Both deals likely would face scrutiny from U.S. regulators.

The person familiar with the China Resources group proposal said that while any China Resource deal may face a review by the Committee on Foreign Investment in the U.S., a review wouldn't find any national security concerns, owing to the types of products Fairchild Semi makes and recent transactions that won CFIUS approval.

CFIUS has approved other acquisitions of U.S. companies by Chinese investors, such as the purchase of OmniVision Technologies Inc. by a consortium that includes Hua Capital Management Co., CITIC Capital Holdings Ltd. and GoldStone Investment Co.

The semiconductor industry has been consolidating as it struggles with weakened demand.

Fairchild, the descendant of a seminal Silicon Valley startup founded in 1957, sells thousands of components used in cars, smartphones, appliances and other products.

The company, which focuses on creating chips that use little power, in recent quarters has faced challenges from lower demand from the telecom sector, and mobile and appliance customers. Last year, the company moved to eliminate jobs and some manufacturing operations as part of a plan to cut costs.

Bloomberg previously had reported that the anonymous offer was from the China Resources-led group.

Write to Tess Stynes at tess.stynes@wsj.com

(END) Dow Jones Newswires

December 08, 2015 14:55 ET (19:55 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.
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