Aixtron (AIXG) shares fell sharply Friday on reports that President Barack Obama will reject a proposed takeover of the chipmaker by a China-based investment fund.

Obama was asked to decide the fate of a controversial €670 million ($714 million) takeover of the German chipmaker by China's Fujian Grand Chip Investment Fund after the powerful Committee on Foreign Investment, or CFIUS, in the United States recommended the deal be withdrawn on national security grounds linked to its technology hub in Sunnyvale, Calif.

Aixtron said in a Nov. 18 statement that neither it nor Fujian Grand were prepared to follow the recommendation, which meant the matter had been referred to the President for a decision by Dec. 2.

"GCI and Aixtron plan to continue to actively engage in further discussions to explore means of mitigation that may be amenable to CFIUS or the U.S. President to resolve outstanding U.S. national security concerns or to take other alternative measures that could allow the parties to proceed with the transaction," the statement said.

Aixtron has technology hubs in Germany, England and Sunnyvale, Calif., and its clash with the authorities in both Germany and the United States comes at a sensitive time for Chinese takeovers.

Aixtron shares fell 7% in early Frankfurt trading to change hands at €3.57 each, the lowest level in nearly nine months.